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Should Ceragon Stock be in Your Portfolio Post Q4 Earnings?
CRNTCeragon Networks(CRNT) ZACKS·2025-02-14 21:01

Core Viewpoint - Ceragon Networks Ltd. reported a mixed performance in Q4 2024, with adjusted EPS of 9 cents, missing estimates by 10%, but showing a 125% year-over-year increase. Revenue rose 18.3% to 106.9million,surpassingestimatesby2.8106.9 million, surpassing estimates by 2.8% and reaching its highest level since Q4 2014 [1][2]. Group 1: Financial Performance - Adjusted EPS for Q4 2024 was 9 cents, missing the Zacks Consensus Estimate by 10%, but increased 125% year over year [1]. - Revenues for the quarter were 106.9 million, reflecting an 18.3% year-over-year growth and surpassing the Zacks Consensus Estimate by 2.8% [2]. - Non-GAAP gross profit increased 15.5% to 36.7million,withanon−GAAPgrossmarginof34.336.7 million, with a non-GAAP gross margin of 34.3%, slightly down from 35.1% year over year [9]. - Adjusted operating income for the quarter was 12.2 million, up from 7.8million[10].Group2:GrowthCatalysts−Ceragonisfocusingonhigh−growthareassuchasmillimeter−waveproductsandprivatenetworks,aimingtodriverecurringrevenues[3].−Thecompanyintroducedinnovativemillimeter−waveproductsliketheIP−50CXandIP−50EX,whichareexpectedtostrengthenitsmarketposition,particularlyinIndia[4].−Ceragon′sfirstNeptune−basedproduct,theIP−100E,aimstodeliver25Gbpscapacityatreducedcosts,withadditionalproductlaunchesplannedfor2025[5].−ThelaunchoftheSmartActivationKeyisexpectedtoenhanceproductflexibilityandpromoteasoftware−as−a−servicebusinessmodel,contributingtosteadyrevenuegrowth[6].−Ceragonreporteda507.8 million [10]. Group 2: Growth Catalysts - Ceragon is focusing on high-growth areas such as millimeter-wave products and private networks, aiming to drive recurring revenues [3]. - The company introduced innovative millimeter-wave products like the IP-50CX and IP-50EX, which are expected to strengthen its market position, particularly in India [4]. - Ceragon's first Neptune-based product, the IP-100E, aims to deliver 25 Gbps capacity at reduced costs, with additional product launches planned for 2025 [5]. - The launch of the Smart Activation Key is expected to enhance product flexibility and promote a software-as-a-service business model, contributing to steady revenue growth [6]. - Ceragon reported a 50% increase in bookings from private networks in 2024, supported by recent acquisitions of Siklu and End 2 End Technologies, which are expected to enhance its competitive edge [7]. Group 3: Market Position and Outlook - Revenues from India were 55.6 million, nearly half of total revenues for Q4, reflecting strong demand as the telecommunications market upgrades to 4G and 5G [8]. - Management projects revenues for 2025 to be between 390millionand390 million and 430 million, with non-GAAP operating margins expected to be at least 10% at the lower end of this range [11]. - The company is facing challenges in its Communications Service Provider business, with a slowdown noted and low visibility entering 2025 [12]. Group 4: Competitive Landscape - Ceragon is experiencing intense competition from Chinese players in various regions, which is impacting revenues [13]. - The company's stock has underperformed compared to peers, with a 24.4% decline in the past month, contrasting with industry growth [14][16]. - Analysts have revised earnings estimates down for the current quarter and year, indicating a cautious outlook [16].