RADCOM Ltd. (RDCM)
Valuation Overview•Is RADCOM Ltd. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Moderate quality score of 64/100, reflecting stable operating margins and manageable leverage.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Solid fundamental quality, though profitability presents a headwind.
Wall Street is cautious, forecasting potential downside alongside robust expected earnings growth. The company currently dilutes shareholders to fund operations and growth rather than returning capital.
RDCM demonstrates adequate business quality with stable profitability. This is backed by a fortress balance sheet, holding significant net cash ($27M) and minimal debt risk.
The company is driving exceptional top-line expansion (15.8% 3Y CAGR) paired with stable bottom-line earnings. Operating efficiency remains adequate with margins around 11.6%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $18.9M | +17.2% | +15.8% | +13.7% | +14.4% | |
| EBITDA | $2.9M | — | — | — | — | |
| Net Income | $3.6M | +72.1% | — | — | — | |
| EPS (Diluted) | $0.21 | +65.1% | — | — | — | |
| Free Cash Flow | $0.00 | -100.0% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 76.0% | 74.5% | 73.5% | 72.4% |
| Operating Margin | 11.6% | 5.1% | -1.4% | -4.3% |
| Net Margin | 16.8% | 11.8% | 3.5% | -0.7% |
| FCF Margin | — | 8.2% | 1.8% | -15.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.27 | $0.28 | +3.7% | ||
| Q1'26 | $0.26 | $0.31 | +19.2% | ||
| Q4'25 | $0.22 | $0.29 | +31.8% | ||
| Q3'25 | $0.22 | $0.25 | +13.6% | ||
| Q2'25 | $0.22 | $0.25 | +13.6% | ||
| Q1'25 | $0.19 | $0.23 | +21.1% | ||
| Q4'24 | $0.19 | $0.23 | +21.1% | ||
| Q3'24 | $0.15 | $0.20 | +33.3% |
Total return is -3.8% (1Y), lagging the benchmark by -24.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -1.7% | -9.0% | — |
| 1Y | -3.8% | -24.6% | — |
| 3YCAGR | +10.5% | -8.7% | — |
| 5YCAGR | +3.4% | -7.5% | — |
| 10YCAGR | +0.6% | -13.9% | — |
The S&P 500 is at 30.6x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about RADCOM Ltd. (RDCM) valuation, health, and returns.
Based on peer relative multiples, RADCOM Ltd. appears Cheap versus peers compared to industry peers.
RADCOM Ltd. has multiple valuation anchors: Peer Relative Fair Value: $30.12 | Wall Street Analyst Target: $11.25 (implying -16.2% upside). A convergence of these signals offers higher conviction.
RADCOM Ltd. displays good financial health with a composite quality score of 64/100, supported by a Altman Z-Score of 5.4 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 7.5%.
RADCOM Ltd. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
RADCOM Ltd.'s current growth trajectory is Stable. The company achieved +17.2% 1Y revenue growth and +65.1% 1Y EPS growth, compared to its 3Y revenue CAGR of +15.8%.
Wall Street consensus is Buy based on 3 analysts, beating EPS expectations in 92% of recent quarters with a 8-quarter streak. The consensus price target represents a -16.2% change from current levels.
Investment risks for RADCOM Ltd. include: -28.7% 1-year max drawdown. Volatility risk is characterized by a beta of 1.04x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.