Financial Performance - Cambium Networks Corporation (CMBM) is expected to report revenues of $34 million for Q4 2024, down from the previous estimate of $40-45 million and a decline from $40.2 million in the same quarter last year [1] - For the full year 2024, revenues are projected at $166 million, a decrease from $220.2 million in 2023, with a net loss estimated at $92 million or $3.29 per share, compared to a net loss of $77.4 million or $2.81 per share in 2023 [2] Impairment and Losses - The company anticipates non-cash charges of $27 million related to the impairment of goodwill and other intangible assets, primarily due to competitive market pressures and soft demand trends [2] - The widening losses in 2024 are attributed to both top-line decline and these impairment charges [2] Internal Control Issues - Cambium has identified issues in its internal control over financial reporting, particularly concerning allowance for credit losses, customer incentives, and IT general controls [3] - The company is taking steps to resolve these material weaknesses and implement additional processes [3] Competitive Environment - Cambium operates in a highly competitive environment, facing rapid technology shifts that require significant investment in research and development (R&D) to enhance product offerings [4] - The company's financial results and the need for R&D investments may strain its margins and impact long-term business prospects [4] Stock Performance - CMBM's stock has decreased by 83.8% over the past year, contrasting with the industry's growth of 41.1% [7] - Currently, Cambium holds a Zacks Rank of 3 (Hold) [8]

Core Viewpoint - Cambium Networks Corporation has filed a Notification of Late Filing for its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, due to the need for additional time to finalize its consolidated financial statements and internal control assessments [1][2]. Financial Performance - For the fiscal year ended December 31, 2024, Cambium Networks expects revenues of approximately $166.0 million, a decrease from $220.2 million in the prior year [8]. - The company anticipates a net loss of approximately $92.0 million, or $3.29 per diluted share, compared to a net loss of $77.4 million, or $2.81 per diluted share, for the fiscal year ended December 31, 2023 [8]. - For the quarter ended December 31, 2024, revenues are expected to be around $34.0 million, down from $40.2 million in the same quarter of the previous year [8]. - The anticipated net loss for the quarter is approximately $47.0 million, or $1.66 per diluted share, compared to a net loss of $52.9 million, or $1.91 per diluted share, for the quarter ended December 31, 2023 [8]. - Included in the net losses for both the quarter and year are approximately $27.0 million of non-cash charges related to impairment of goodwill and other intangible assets, attributed to weakened forecast demand and competitive pressures [8]. Internal Control Issues - The company has identified material weaknesses in its internal control over financial reporting, particularly concerning Allowance for Credit Losses, Customer Incentives, and Information Technology General Controls [3]. - Cambium Networks is implementing measures to improve its internal control over financial reporting, with oversight from the Audit Committee and assistance from external advisors [3]. Going Concern - The Annual Report on Form 10-K is expected to include disclosures regarding substantial doubt about the company's ability to continue as a going concern [6].

Core Insights - Cambium Networks announced the successful OpenRoaming™ certification of its Wi-Fi 7 indoor access point, the X7-35X, highlighting its commitment to seamless and secure wireless connectivity for various sectors [1][2] OpenRoaming Overview - OpenRoaming is a framework that automates Wi-Fi connectivity, allowing users to connect without manual SSID selection or credential entry, providing a cellular-like experience with enterprise-grade security [3] Benefits of OpenRoaming for Cambium Customers - The OpenRoaming certification enables next-generation Wi-Fi experiences across multiple environments, including hospitality, education, healthcare, and smart cities, enhancing user engagement and operational efficiency [4][5] X7-35X Wi-Fi 7 AP Features - The X7-35X offers tri-band support (2.4 GHz, 5 GHz, and 6 GHz), Multi-Link Operation (MLO) for improved throughput, advanced security aligned with OpenRoaming standards, and AI-powered analytics for real-time optimization [6]

Group 1 - Cambium (CMBM) has gained approximately 62.1% year-to-date, significantly outperforming the Computer and Technology sector, which has returned an average of -1.6% [4] - Cambium holds a Zacks Rank of 2 (Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 4.4% increase in the consensus estimate for full-year earnings over the past three months [3] - Cambium is part of the Wireless National industry, which has an average gain of 16.7% this year, further highlighting its strong performance relative to its peers [5] Group 2 - CrowdStrike Holdings (CRWD), another stock in the Computer and Technology sector, has a year-to-date return of 11% and also holds a Zacks Rank of 2 (Buy) [4][5] - The Security industry, to which CrowdStrike belongs, has moved +8.5% year-to-date, ranking 25 in the Zacks Industry Rank [6] - Investors are encouraged to monitor both Cambium and CrowdStrike Holdings for their potential to maintain solid performance in the Computer and Technology sector [6]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Cambium (CMBM) identified as a strong candidate due to its favorable growth metrics and Zacks Rank [2][10]. Group 1: Earnings Growth - Cambium's historical EPS growth rate is 3.4%, but projected EPS growth for this year is expected to be 96.4%, significantly surpassing the industry average of 41.4% [5]. Group 2: Asset Utilization Ratio - Cambium has an asset utilization ratio (sales-to-total-assets ratio) of 0.77, indicating that the company generates $0.77 in sales for every dollar in assets, compared to the industry average of 0.36, showcasing superior efficiency [6]. Group 3: Sales Growth - The company's sales are projected to grow by 15.6% this year, which is substantially higher than the industry average growth of 1.5% [7]. Group 4: Earnings Estimate Revisions - The current-year earnings estimates for Cambium have been revised upward, with the Zacks Consensus Estimate increasing by 2.5% over the past month, indicating a positive trend in earnings revisions [8]. Group 5: Overall Positioning - Cambium holds a Zacks Rank of 2 (Buy) and a Growth Score of A, positioning it well for potential outperformance in the growth stock category [10].

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Core Viewpoint - Cambium (CMBM) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Cambium is expected to earn -$0.98 per share for the fiscal year ending December 2024, reflecting a year-over-year change of 10.9% [8]. Analyst Sentiment and Market Position - Analysts have raised their earnings estimates for Cambium, with the Zacks Consensus Estimate increasing by 11.5% over the past three months [8]. - The upgrade to Zacks Rank 2 places Cambium in the top 20% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [10]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks which have generated an average annual return of +25% since 1988 [7][9].

For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Cambium (CMBM) been one of those stocks this year? By taking a look at the stock's year-to-date performance in comparison to its Computer and Technology peers, we might be able to answer that question.Cambium is one of 609 companies in the Computer and Technology group. The Computer and Technology group currently sits at #2 within the Zacks Sector Rank. ...

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Financial Performance - Total revenue for the three-month period ended September 30, 2024, was $43.7 million, an increase of 1.6% year-over-year[110] - Operating loss for the same period was $8.1 million, with a net loss of $9.7 million[110] - Revenues for the three-month period ended September 30, 2024, increased by $0.7 million, or 1.6%, to $43.7 million compared to $43.0 million for the same period in 2023, driven primarily by higher Enterprise product revenues[120] - The company reported a net loss of $9.7 million for the three-month period ended September 30, 2024, compared to a net loss of $26.2 million in the same period of 2023[120] - Revenues decreased by $48.0 million, or 26.7%, to $132.0 million for the nine-month period ended September 30, 2024, from $180.0 million for the same period in 2023[135] Revenue Breakdown - Revenues from Enterprise products are beginning to rebound, with expectations for continued improvement throughout the remainder of 2024[105] - Enterprise product revenues surged by $12.7 million, or 506.6%, from $2.5 million in 2023 to $15.2 million in 2024, with significant growth in Europe, Middle East, and Africa regions[124] - Point-to-Multi-Point product revenues decreased by $5.6 million, or 23.7%, from $23.6 million in 2023 to $18.0 million in 2024, primarily due to lower demand in Europe, Middle East, and Africa[122] - North America revenues increased by $3.5 million, or 19.9%, from $17.8 million in 2023 to $21.3 million in 2024, driven by higher demand for Wi-Fi 6 products[125] - Europe, Middle East, and Africa revenues decreased by $2.1 million, or 14.5%, from $14.3 million in 2023 to $12.2 million in 2024, mainly due to lower demand for PMP and PTP products[125] Cost Management - Total operating expenses decreased by $7.6 million, or 22.9%, from $33.1 million in 2023 to $25.5 million in 2024, with notable reductions in research and development and general and administrative expenses[128] - Research and development expenses fell by $3.9 million, or 29.5%, to $9.3 million in 2024, primarily due to lower staff-related costs and reduced engineering materials spending[129] - General and administrative expense decreased by $2.5 million, or 29.2%, to $6.1 million for the three-month period ended September 30, 2024, from $8.7 million for the same period in 2023[131] - Sales and marketing expense decreased by $5.0 million, or 15.4%, to $27.8 million for the nine-month period ended September 30, 2024, from $32.9 million for the same period in 2023[145] Macroeconomic Factors - The company is facing softened demand due to macroeconomic factors, including higher interest rates and concerns about a global economic slowdown[104] - The company continues to monitor the impact of macroeconomic factors, including inflationary pressures and potential global recession[106] Debt and Compliance - As of September 30, 2024, the company was not in compliance with its quarterly EBITDA covenant under its Amended Credit Agreement[109] - The company is seeking forbearance from Bank of America due to noncompliance with the quarterly EBITDA covenant and monthly liquidity covenant as of October 31, 2024[157] - As of September 30, 2024, the company had $22.8 million outstanding on the term loan and $45.0 million on the revolving credit facility, with effective interest rates of 8.85% and 8.66%, respectively[156] Cash Flow and Liquidity - Cash balance increased by $27.8 million to $46.5 million as of September 30, 2024, following a $45.0 million draw on the revolving credit facility[150] - Net cash used in operating activities improved from $10.7 million in 2023 to $4.3 million in 2024, despite a net loss of $45.3 million[153] - Cash used in investing activities increased to $10.8 million in 2024, primarily due to leasehold improvements for the new headquarters[154] - Net cash provided by financing activities was $43.0 million in 2024, mainly from the drawdown on the revolving credit facility[155] Impairment and Valuation - The fair value of the Company's one reporting unit was higher than its carrying value, indicating no impairment of goodwill as of September 30, 2024[165] - No impairment charges were identified in the recoverability test of long-lived assets as of September 30, 2024[167] Interest Expense - Interest expense increased from $0.6 million in 2023 to $1.4 million in 2024, reflecting higher borrowing costs[120] - Interest expense increased by $0.8 million, or 126.3%, to $1.4 million for the three-month period ended September 30, 2024, from $0.6 million for the same period in 2023[132] - Interest expense increased by $1.8 million, or 99.8%, to $3.6 million, driven by higher interest rates on the term loan and the addition of interest on the revolving credit facility[148] Market Risks - The Company has not entered into any foreign currency hedging transactions, exposing it to risks related to fluctuations in foreign currency exchange rates[169] - The Company’s revenue contracts are primarily denominated in U.S. dollars, making it vulnerable to fluctuations in foreign currency values[169] - There have been no material changes in market risk since December 31, 2023[172]