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On Monday, Craig-Hallum initiated coverage on shares of Crexendo Inc. (NASDAQ:CXDO), currently trading at $4.12, with a Buy rating and an $8.00 price target. The firm’s analysts believe Crexendo is on the cusp of dominating the Unified Communications as a Service (UCaaS) market. This optimism is fueled by the anticipated exit of competitors and Crexendo’s ability to capture market share through product development and go-to-market flexibility. InvestingPro data shows analysts maintain a Strong Buy consensus, with price targets ranging from $7.50 to $10.00.
According to Craig-Hallum, Crexendo’s business fundamentals are robust, and the market has yet to fully recognize the significant opportunities that lie ahead for the company. Supporting this view, InvestingPro data reveals the company maintains a healthy 62.2% gross profit margin and has achieved 14.4% revenue growth in the last twelve months. The analysts project that Crexendo will see unmodeled revenue growth and margin expansion as it captures more of the disrupted market.
The firm expects Crexendo’s financials to show a positive inflection point beyond the fiscal year 2025, with the stock price projected to rise in response to the company’s continued impressive execution. The analysts at Craig-Hallum see the current market situation as presenting a favorable risk/reward scenario for investors. InvestingPro analysis suggests the stock is currently undervalued, with strong financial health indicators and multiple ProTips pointing to growth potential.
Crexendo’s commitment to innovation and strategic market positioning is expected to drive its success in the rapidly evolving UCaaS industry. With the market undergoing changes and Crexendo’s strong fundamentals, including a solid current ratio of 2.22 and minimal debt-to-equity of 0.04, Craig-Hallum’s analysts are confident in the company’s future performance and the potential for investor returns. For deeper insights into Crexendo’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Crexendo Inc. reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.06, compared to the forecasted $0.05. The company also reported revenue of $16.2 million, exceeding the anticipated $15.64 million. This marks a 15% year-over-year revenue increase, highlighting the company’s strong financial performance. Crexendo’s gross margins improved from 59% to 62%, and the company launched new AI-powered software features, contributing to its growth trajectory. Additionally, Crexendo’s cash and cash equivalents nearly doubled to $18.2 million by the end of 2024. In other developments, Crexendo appointed Todd A. Goergen as Lead Independent (LON:IOG) Director of its Board of Directors, a move expected to enhance corporate oversight and governance. The company also successfully migrated 10 Microsoft (NASDAQ:MSFT) Metaswitch and Cisco (NASDAQ:CSCO) BroadSoft licensees in 2024, indicating substantial growth opportunities. Crexendo’s strategic positioning amid industry changes has been recognized by firms like Frost and Sullivan and Deloitte, which have highlighted the company’s rapid growth and market leadership.
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