Radcom Ltd. Ordinary Shares (RDCM)

FairStock Score: 64/100 — STEADY

Key Financials

Strengths

• Generates $7 million in annual free cash flow (2.4% yield on market cap)
• Solid return on equity of 11.4% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.03, providing financial flexibility
• Altman Z-Score of 5.8 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 15.9% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($10) with negative 53% margin of safety—limited downside protection

AI Analysis

Radcom Ltd. Ordinary Shares is a micro-cap communication services company valued at $268 million. Revenue stands at $71 million. From a quality standpoint, Radcom shows Altman Z-Score of 5.8 confirms fortress-level solvency and adequate 11% ROE. On valuation, the stock is reasonably priced at 21.7x earnings, with trades above its Graham Number with a negative 53% margin. Growth dynamics show revenue growing at 15.9% and profit growth of 62.0%. Our composite FairStock Score of 64/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Radcom's 16% revenue growth trajectory could accelerate as it captures additional market share in the communication services sector. With $7 million in annual free cash flow (2.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the communication services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer