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JMP Securities cites EBITDA potential on Ribbon Communications stock

EditorEmilio Ghigini
Published 2024-04-29, 04:50 a/m

On Monday, JMP Securities assumed coverage on Ribbon Communications (NASDAQ:RBBN) stock, maintaining a Market Outperform rating with a price target of $6.00. This decision follows Ribbon Communications' recent financial performance report for the first quarter of 2024 (F1Q24).

The company's earnings per share (EPS) came in at ($0.01), aligning with consensus estimates, while its Adjusted EBITDA surpassed expectations at $11.7 million compared to the predicted $7.9 million. Despite revenues falling slightly short of the consensus at $179.7 million, against an anticipated $185.0 million, the firm's stock has experienced an increase.

Ribbon Communications' stock performance has shown resilience, with a 7.9% rise over the last twelve months. This growth is notably higher than the 6.1% increase observed in the Russell 3000 index during the same period. The company's ability to exceed Adjusted EBITDA expectations, while meeting EPS forecasts, has contributed to the analyst's positive outlook and the reaffirmation of the $6 price target.

The Market Outperform rating indicates that JMP Securities anticipates Ribbon Communications' stock will outperform the average return of the stocks covered by the analysts at the firm. The price target set by JMP Securities reflects their confidence in the potential for Ribbon Communications' share value to grow and reach the specified level in the future.

InvestingPro Insights

As Ribbon Communications (NASDAQ:RBBN) navigates the financial landscape post-Q1 2024 results, InvestingPro data and tips offer a deeper dive into the company's performance and potential. With a market capitalization of $540.6 million and a notable price uptick of 50.48% over the last six months, Ribbon Communications has shown significant resilience in its stock performance. This aligns with JMP Securities' positive outlook and their Market Outperform rating.

InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period and predict the company will be profitable this year, which could be driving factors behind the reaffirmed $6 price target. Additionally, the company's significant return over the last week of 22.27% reflects a strong short-term performance, despite not paying dividends to shareholders.

From a valuation perspective, Ribbon Communications is trading at a high EBIT valuation multiple, with a Price/Book ratio in the last twelve months as of Q1 2024 standing at 1.27. This suggests that the market is pricing in future growth expectations. For investors looking to delve further into Ribbon Communications' prospects, there are additional InvestingPro Tips available at https://www.investing.com/pro/RBBN, and with the use of coupon code PRONEWS24, an additional 10% off a yearly or biyearly Pro and Pro+ subscription can be obtained.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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