One-glance verdict
Undervalued
$15.17 our estimate vs market $5.81
Wall Street consensus: $10.92 (-28.0% lower than our fair-value estimate)
62% below our estimate, below the bear case
Fundamentals snapshot
Crexendo, Inc.
CXDO · NCM · Communication Services · Telecom Services
Current price
$5.81
52-week range
$5.54 - $11.23
Market cap
$193.20M
Balance sheet
Healthy
246.84x Strong cushion
Net cash $12.65M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 18.7% last year.
- Reward Returns 6.3% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 3/10 years.
What this company does
Crexendo, Inc.
Crexendo sells modern communication tools to businesses, like internet-based phone systems and video conferencing software that replace traditional office landlines. The company makes most of its money from monthly subscriptions for these cloud-based services. This creates recurring revenue (a predictable stream of income the company can count on receiving regularly), which is important because it can lead to more stable and predictable business performance than one-time sales.
How the company got here
Crexendo started in 1995 and was originally known as iMergent, Inc. before changing its name in 2011 to better reflect its focus on cloud-based technologies. A major turning point was its 2021 acquisition of NetSapiens, a software company whose platform is used by other communication service providers. This move dramatically increased the number of people using Crexendo's technology and has been central to its growth, followed by other key acquisitions like Estech Systems to further expand its reach.
What it actually does
Crexendo provides businesses with a phone and communication system that works over the internet instead of traditional phone lines. Think of it as a complete communications toolkit for a company, offering services like voice calls, video meetings, team messaging, and solutions for customer support centers (a department that handles high volumes of customer calls). This allows employees to stay connected whether they are in the office, working from home, or on their mobile phones, all using one unified system.
Cloud Telecommunications Services
This is Crexendo's direct-to-business offering, where they sell their all-in-one communication package, known as Crexendo VIP™, straight to companies. Businesses pay a recurring subscription fee to get access to phone services, video conferencing, and contact center tools. This segment makes up the majority of the company's revenue and is like the retail arm of the company, serving businesses of all sizes directly.
Software Solutions
In this part of the business, Crexendo provides the underlying software platform to other service providers, like telecom companies or IT specialists. These partners then use Crexendo's technology to sell their own branded communication services to their own customers. Crexendo makes money by charging these providers for software licenses and support. This is a fast-growing segment that allows Crexendo to reach many more end-users indirectly through its network of over 250 partners.
What management is betting on now
The company's main focus is on growing through strategic acquisitions, often buying successful companies that are already using its software platform. Another major priority is expanding its Artificial Intelligence (AI) capabilities, such as an AI-powered receptionist, to offer smarter, more automated services. By adding these new features, Crexendo aims to increase the value of its platform, which helps both its direct customers and its network of service providers generate more recurring revenue (predictable income from ongoing subscription payments).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$1.62M
FY2024 Q4
$2.15M
FY2025 Q1
$1.24M
FY2025 Q2
$1.28M
FY2025 Q3
$4.42M
FY2025 Q4
$2.35M
FY2026 Q2
$2.75M
Revenue
$24.65M
Net income
$1.05M
Diluted EPS
0.03
Operating cash flow
$2.75M
Free cash flow
$2.75M
Fetching…
Sources
Revenue
$20.71M
Net income
$578.00K
Diluted EPS
0.02
Operating cash flow
$2.04M
Free cash flow
—
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Sources
Revenue
$18.06M
Net income
$1.22M
Diluted EPS
0.04
Operating cash flow
$2.35M
Free cash flow
$2.35M
Fetching…
Sources
Revenue
$17.50M
Net income
$1.45M
Diluted EPS
0.05
Operating cash flow
$4.42M
Free cash flow
$4.42M
Fetching…
Sources
Revenue
$16.55M
Net income
$1.23M
Diluted EPS
0.04
Operating cash flow
$1.29M
Free cash flow
$1.28M
Fetching…
Sources
Revenue
$16.06M
Net income
$1.17M
Diluted EPS
0.04
Operating cash flow
$1.24M
Free cash flow
$1.24M
Fetching…
Sources
Revenue
$16.24M
Net income
$507.00K
Diluted EPS
0.02
Operating cash flow
$2.18M
Free cash flow
$2.15M
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Sources
Revenue
$15.63M
Net income
$148.00K
Diluted EPS
0.00
Operating cash flow
$1.62M
Free cash flow
$1.62M
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Sources
Is it cheap or expensive?
Fair value $15.17 vs current price $5.81
Wall Street consensus is the average analyst price target: $10.92 (-28.0% lower than our fair-value estimate).
Our most-likely fair value is $15.17 a share — about 161.1% above today's price of $5.81, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $12.6M - more cash than debt. Interest coverage 246.8x.
Net debt
$-12.65M
Interest coverage
246.84x
Crexendo, Inc.'s profit covers its interest bill about 246.8 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
CXDO
BASELINE
Crexendo, Inc.
Total debt $5.64M Interest coverage 246.84x This is the baseline the peer rows are being compared against.
Total debt $60.84M Interest coverage 36.38x -85% vs CXDO Carries about 6.8x less debt cushion than CXDO.
Total debt $357.52M Interest coverage 1.07x -100% vs CXDO Carries about 231.6x less debt cushion than CXDO.
Total debt $39.72M Interest coverage -0.30x -100% vs CXDO This peer has almost no interest-payment cushion compared with CXDO.
What you should know
The case for and against CXDO
3 Rewards
0 Risks
Rewards
-
Revenue grew 18.7% last year.
-
Returns 6.3% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
44.69x
Forward P/E
13.31x
P/B
2.47x
P/S
2.39x
EV/EBITDA
19.92x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
62.9%
Operating margin
5.0%
Net margin
5.3%
ROE
6.3%
ROA
3.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.07x
Current ratio
2.06x
Quick ratio
1.63x
Total debt
$5.64M
Total cash
$18.29M
Growth
How the business has been compounding
Revenue TTM
$80.91M
Revenue 5Y CAGR
24.8%
EPS TTM
0.13
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$11.55M
Free CF TTM
$9.28M
FCF margin
11.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2023-03-30