Latest news with #CXDO
Yahoo
22-05-2025
- Business
- Yahoo
Calculating The Intrinsic Value Of Crexendo, Inc. (NASDAQ:CXDO)
Crexendo's estimated fair value is US$6.18 based on 2 Stage Free Cash Flow to Equity Current share price of US$5.69 suggests Crexendo is potentially trading close to its fair value Analyst price target for CXDO is US$8.33, which is 35% above our fair value estimate Today we will run through one way of estimating the intrinsic value of Crexendo, Inc. (NASDAQ:CXDO) by estimating the company's future cash flows and discounting them to their present value. We will use the Discounted Cash Flow (DCF) model on this occasion. Don't get put off by the jargon, the math behind it is actually quite straightforward. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. Our free stock report includes 1 warning sign investors should be aware of before investing in Crexendo. Read for free now. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$6.98m US$7.81m US$7.33m US$8.50m US$9.77m US$10.4m US$11.0m US$11.6m US$12.0m US$12.5m Growth Rate Estimate Source Analyst x2 Analyst x3 Analyst x1 Analyst x1 Analyst x1 Est @ 6.80% Est @ 5.64% Est @ 4.83% Est @ 4.26% Est @ 3.87% Present Value ($, Millions) Discounted @ 8.0% US$6.5 US$6.7 US$5.8 US$6.2 US$6.6 US$6.6 US$6.4 US$6.2 US$6.0 US$5.8 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$63m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.0%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$13m× (1 + 2.9%) ÷ (8.0%– 2.9%) = US$253m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$253m÷ ( 1 + 8.0%)10= US$117m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$180m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$5.7, the company appears about fair value at a 8.0% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Crexendo as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.0%, which is based on a levered beta of 1.177. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Crexendo Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Weakness No major weaknesses identified for CXDO. Opportunity Annual earnings are forecast to grow faster than the American market. Current share price is below our estimate of fair value. Threat Revenue is forecast to grow slower than 20% per year. Valuation is only one side of the coin in terms of building your investment thesis, and it is only one of many factors that you need to assess for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Crexendo, there are three pertinent items you should assess: Risks: Take risks, for example - Crexendo has 1 warning sign we think you should be aware of. Future Earnings: How does CXDO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQCM every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
14-05-2025
- Business
- Yahoo
Wall Street Analysts Think Crexendo (CXDO) Could Surge 42.86%: Read This Before Placing a Bet
Crexendo (CXDO) closed the last trading session at $5.81, gaining 24.2% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $8.30 indicates a 42.9% upside potential. The mean estimate comprises five short-term price targets with a standard deviation of $0.97. While the lowest estimate of $7.50 indicates a 29.1% increase from the current price level, the most optimistic analyst expects the stock to surge 72.1% to reach $10. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts. While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice. However, an impressive consensus price target is not the only factor that indicates a potential upside in CXDO. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside. According to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading. While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why? They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts. However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces. That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism. There has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For the current year, two estimates have moved higher over the last 30 days compared to no negative revision. As a result, the Zacks Consensus Estimate has increased 18.2%. Moreover, CXDO currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Therefore, while the consensus price target may not be a reliable indicator of how much CXDO could gain, the direction of price movement it implies does appear to be a good guide. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Crexendo Inc. (CXDO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-05-2025
- Business
- Yahoo
Crexendo Inc (CXDO) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Competitive ...
Release Date: May 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Crexendo Inc (NASDAQ:CXDO) reported a 12% year-over-year increase in total revenue, reaching $16.1 million. The software solutions revenue grew by 33%, with gross margins in this segment increasing by 500 basis points to 78%. The company achieved GAAP profitability for the seventh consecutive quarter, with a net income of $1.2 million. Crexendo Inc (NASDAQ:CXDO) surpassed 6 million users on its software solutions platform, indicating strong demand. The company is strategically investing in innovation and infrastructure, including a migration to Oracle Cloud Infrastructure, expected to drive cost savings and margin expansion. Product revenue declined by 22% to $1.1 million compared to the previous year. Service revenue gross margin decreased by 3% quarter over quarter to 57%. The telecom market remains highly competitive, with some competitors engaging in unsustainable pricing practices. Operating expenses increased by 8% to $14.9 million, impacting overall profitability. There is uncertainty in the market due to macroeconomic factors, although Crexendo Inc (NASDAQ:CXDO) has not yet seen a measurable weakening in demand. Warning! GuruFocus has detected 5 Warning Signs with CXDO. Q: Jeff, you mentioned sustainable double-digit growth. Is this guidance relevant for the entire year 2025 or specifically for Q2? A: Jeff Korn, CEO: The guidance is for year-over-year growth. While there can be quarterly variances, we are confident in achieving a minimum of 10% year-over-year growth. Q: Are there any changes in competitor behavior regarding aggressive pricing and incentives? A: Jeff Korn, CEO: The behavior remains similar to 2024. We believe these practices are unsustainable, and we continue to focus on profitable growth by delivering superior service and customer experience. Q: Can you provide more details on the impressive software gross margin improvement and its sustainability? A: Ron Vincent, CFO: The margin improvement is driven by increased revenue in the software solutions division. While we had a great quarter, we target a 73-75% range for the full year. Q: How is the acquisition of Metaswitch by Allianza affecting the market, and what are you seeing in terms of competition? A: Jeff Korn, CEO: We haven't seen significant changes yet. Our differentiated model and service level continue to attract interest, and we are confident in winning more business due to our superior product and flexibility. Q: Can you provide an update on the EVP app ecosystem and its integration progress? A: Anan Bosch, CSO: We are onboarding 10 to 12 partners regularly, with a recent increase in interest for AI and customer service applications. The ecosystem is growing, and we are seeing significant interest in these areas. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
09-05-2025
- Business
- Yahoo
Crexendo Inc (CXDO) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Competitive ...
Release Date: May 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Crexendo Inc (NASDAQ:CXDO) reported a 12% year-over-year increase in total revenue, reaching $16.1 million. The software solutions revenue grew by 33%, with gross margins in this segment increasing by 500 basis points to 78%. The company achieved GAAP profitability for the seventh consecutive quarter, with a net income of $1.2 million. Crexendo Inc (NASDAQ:CXDO) surpassed 6 million users on its software solutions platform, indicating strong demand. The company is strategically investing in innovation and infrastructure, including a migration to Oracle Cloud Infrastructure, expected to drive cost savings and margin expansion. Product revenue declined by 22% to $1.1 million compared to the previous year. Service revenue gross margin decreased by 3% quarter over quarter to 57%. The telecom market remains highly competitive, with some competitors engaging in unsustainable pricing practices. Operating expenses increased by 8% to $14.9 million, impacting overall profitability. There is uncertainty in the market due to macroeconomic factors, although Crexendo Inc (NASDAQ:CXDO) has not yet seen a measurable weakening in demand. Warning! GuruFocus has detected 5 Warning Signs with CXDO. Q: Jeff, you mentioned sustainable double-digit growth. Is this guidance relevant for the entire year 2025 or specifically for Q2? A: Jeff Korn, CEO: The guidance is for year-over-year growth. While there can be quarterly variances, we are confident in achieving a minimum of 10% year-over-year growth. Q: Are there any changes in competitor behavior regarding aggressive pricing and incentives? A: Jeff Korn, CEO: The behavior remains similar to 2024. We believe these practices are unsustainable, and we continue to focus on profitable growth by delivering superior service and customer experience. Q: Can you provide more details on the impressive software gross margin improvement and its sustainability? A: Ron Vincent, CFO: The margin improvement is driven by increased revenue in the software solutions division. While we had a great quarter, we target a 73-75% range for the full year. Q: How is the acquisition of Metaswitch by Allianza affecting the market, and what are you seeing in terms of competition? A: Jeff Korn, CEO: We haven't seen significant changes yet. Our differentiated model and service level continue to attract interest, and we are confident in winning more business due to our superior product and flexibility. Q: Can you provide an update on the EVP app ecosystem and its integration progress? A: Anan Bosch, CSO: We are onboarding 10 to 12 partners regularly, with a recent increase in interest for AI and customer service applications. The ecosystem is growing, and we are seeing significant interest in these areas. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
28-03-2025
- Business
- Yahoo
Why Crexendo Inc (CXDO) Is Surging In 2025?
We recently published a list of . In this article, we are going to take a look at where Crexendo Inc (NASDAQ:CXDO) stands against other telecom stocks that are surging in 2025. The telecom sector has seen many ups and downs in the past few years. Post-COVID, these stocks declined even more due to the inflation wave and the subsequent interest rate hikes. Telecommunication companies usually have significant debt on their balance sheets due to infrastructure CapEx, and they were among the hardest hit. However, rates are now slowly coming down, and these stocks are also starting to bottom out and turn a corner. Many telecom stocks are still profitable and pay dividends. Falling bond yields are making them even more attractive. It's a good idea to keep tabs on which telecom stocks are spearheading the gains so far this year. For this article, I screened the best-performing telecom stocks year-to-date. I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A telecommunications tower in a rural setting, showing the reach of cloud telecom services. Number of Hedge Fund Holders In Q4 2024: 10 Crexendo Inc (NASDAQ:CXDO) provides cloud and unified communications services. It also has cloud center and cloud business services. The stock is up significantly so far in 2025 due to solid Q4 2024 earnings. It surpassed analysts' expectations with an EPS of $0.06 compared to the $0.05 projection. Revenue grew 15% year-over-year to $16.2 million and exceeded the $15.64 million forecast. Gross margins also improved from 59% to 62%. The consensus price target of $8.75 implies 53.78% upside. CXDO stock is up 8.80% year-to-date. Overall, CXDO ranks 14th on our list of telecom stocks that are surging in 2025. While we acknowledge the potential of CXDO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CXDO but that trades at less than 5 times its earnings, check out our report about the . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
