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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3642
Positioning
Market Dominance
Manufacturing
Computer Software
$572M
Bruce McClelland
Ribbon Communications Inc. provides communications technology in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It operates through two segments, Cloud and Edge, and IP Optical Networks. The Cloud and Edge segment provides software and hardware products; and solutions and services for enabling voice over internet protocol communications, voice over long-term evolution, and voice over 5G communications and unified communications and collaboration. It also offers session border controller and network transformation products. This segment serves private, public, or hybrid cloud infrastructures, as well as data centers, enterprise premises, and service provider networks. It also provides multiple solutions for VoIP, VoLTE, VoNR, and UC&C in network, on-premises, or via the telco cloud. The IP Optical Networks segment provides hardware and software solutions for IP networking, switching, routing, and optical transport to support and enable technologies, such as 5G, distributed cloud computing, and corresponding applications. It also offers multiple solutions, including 5G-native solutions for mobile-backhaul, metro and edge aggregation, core networking, data center interconnect, legacy NTR, and transport solutions for wholesale carriers. This segment serves utilities, government, defense, finance, transportation, and education and research industries, as well as service providers and enterprises. It also provides advanced analytics solutions and next generation products that provides cloud-native and streaming analytics platform for networks and subscribers. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Plano, Texas.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = RBBN ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$RBBN Ribbon Communications Inc. | 39 | 58 | 67 | 13 | - | 64.4x | -17.5% | -5.7% | 49.3% | -2.0% | -7.9% | 11.8% | 0.0% | 96.0x | $572M | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
Ribbon Communications Inc. (RBBN) receives a "Avoid" rating with a composite score of 39.2/100. It ranks #3642 out of 7,333 stocks in our coverage universe and carries a 1-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Bruce McClelland
Chief Executive Officer
58
30
41
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for RBBN
Headcount
—
HQ Base
Pending Verification
Lagging peers — losers tend to keep underperforming
Trading at a discount to fundamentals — favorable entry valuation
Average quality profile
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Below-average composite — caution warranted
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for RBBN.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
ROIC 0.5% vs WACC 6.2% (spread -5.7%)
GM 49% vs sector 43%, OM -2% vs sector 1%
Capital turnover 0.80x, R&D intensity 21.7%
Rev growth 12%, 9yr history
Interest coverage N/A, Net debt/EBITDA 97.5x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our quantitative model flags Ribbon Communications Inc. with an Avoid rating, assigning a composite score of 39.2/100 and 1 out of 5 stars. Ranked #3642 of 7,333 stocks, RBBN falls in the bottom tier across key factors. Historically, stocks with this profile have faced elevated risk of underperformance and capital loss.
With a quality score of 58/100, RBBN shows adequate but unremarkable business quality. The company reports a return on equity of -17.5% (sector avg: -2.5%), gross margins of 49.3% (sector avg: 42.5%), net margins of -7.9% (sector avg: -0.2%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
RBBN's value score of 67/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include an EV/EBITDA of 64.39x, a P/B ratio of 1.02x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
Ribbon Communications Inc.'s investment score of 30/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 11.8% vs. a sector average of 5.9% and a return on assets of -5.7% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
Ribbon Communications Inc. is experiencing notably weak momentum with a score of just 13/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at 11.8% year-over-year, while a beta of 1.27 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
RBBN's stability score of 41/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.27 and a debt-to-equity ratio of 96.00x (sector avg: 0.2x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
Ribbon Communications Inc.'s short interest score of 25/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include above-average market sensitivity (beta: 1.27), elevated leverage (D/E: 96.00x), small-cap liquidity risk. At $572M (small-cap), RBBN carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
Ribbon Communications Inc. is a small-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #3642 of 7,333 overall (50th percentile). Key comparisons include ROE of -17.5% trailing the -2.5% sector median and operating margins of -2.0% below the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While RBBN currently exhibits a AVOID profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Momentum (13) would have the largest impact on the composite score.
EV/EBITDA 462% ABOVE SECTOR MEDIAN
ROE 604% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 16% ABOVE SECTOR MEDIAN (FAVORABLE)
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate Ribbon Communications Inc. (RBBN) as Avoid with a composite score of 39.2/100 at a current price of $2.21. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.
The rating is primarily driven by strength in value (67th percentile) and quality (58th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (13th percentile) and investment (30th percentile) tempers our overall conviction. We assign a No Moat rating (39/100), High uncertainty, and Poor capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
Ribbon Communications Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 39.2/100 places it at rank #3642 in our full 7,333-stock universe. At $572M in market capitalization, Ribbon Communications Inc. is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue is growing at 12%, though momentum at the 13th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.
The margin cascade tells an important story: gross margins of 49% (+6.8pp vs sector) narrow to operating margins of -2% (-3.3pp vs sector) and net margins of -7.9%, yielding a gross-to-net conversion rate of -16%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $2.21, Ribbon Communications Inc. is trading near fair value based on current fundamentals. Our value factor score of 67/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at EV/EBITDA of 64.4x (at a premium), P/B of 1.0x, P/S of 0.4x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
Gross margins of 49% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
Revenue growth of 12% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
A value factor score of 67/100 suggests the market is underpricing these fundamentals, creating a potential margin of safety for new investors.
The Avoid rating (composite 39.2/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Thin net margins of -7.9% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
We assign a High uncertainty rating to Ribbon Communications Inc.. Key risk factors include current negative profitability (net margin -7.9%), the combination of leverage (96% D/E) and thin margins (-7.9% net) amplifies downside risk. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: current negative profitability (net margin -7.9%); the combination of leverage (96% D/E) and thin margins (-7.9% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 41th percentile and quality factor at the 58th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 49% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.
We rate Ribbon Communications Inc.'s capital allocation as Poor. Key concerns include low returns on equity (-17.5%), negative profitability, weak asset returns (ROA -5.7%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Ribbon Communications Inc. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, Ribbon Communications Inc. receives a Avoid rating with a composite score of 39.2/100 (rank #3642 of 7,333). Our quantitative framework assigns a No Moat (39/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 42/100.
Our analysis does not support a constructive view on Ribbon Communications Inc. at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign Ribbon Communications Inc. a meaningful economic moat, scoring 39/100 on our composite assessment. The ROIC-WACC spread of -5.7% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, growth durability, reached only 15/20.
The strongest moat sources are growth durability (15/20) and margin superiority (12.9/20). Rev growth 12%, 9yr history. GM 49% vs sector 43%, OM -2% vs sector 1%. These pillars form the core of Ribbon Communications Inc.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include financial resilience (0.8/20) and economic value creation (3/20). Interest coverage N/A, Net debt/EBITDA 97.5x. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect Ribbon Communications Inc.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 49% providing a solid profitability foundation, moderate revenue growth of 12%. The margin cascade from 49% gross to -2% operating to -7.9% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 58th percentile.
The margin profile shows gross margins of 49%, operating margins of -2%, net margins of -7.9%. Return metrics include ROE of -17.5% and ROA of -5.7%. Relative to the Manufacturing sector, gross margins are 6.8 percentage points above the sector median of 43%, and ROE of -17.5% compares to a sector median of -2.5%.
The balance sheet reflects above-average leverage with D/E of 96%, revenue growth of 12%. The sector median D/E is 0%, putting Ribbon Communications Inc. at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Weak momentum (13th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
Above 50MA
37.18%
Net New Highs
+51081
Operator: Greetings, and welcome to the Ribbon Communications Fourth Quarter and Full Year 2025 Financial Results Conference Call. At this time, participants are in a listen-only mode.
B. Riley Securities has decided to maintain its Buy rating of Ribbon Comms (NASDAQ:RBBN) and lower its price target from $7.00 to $6.00. Shares of Ribbon Comms are trading up 2.63% over the last 24 hours, at $1.95 per share. A move to $6.00 would account for a 207.69% increase from the current share price. About Ribbon Comms Ribbon Communications Inc provides network solutions primarily to telecommunications, wireless and cable service providers worldwide. It enables service providers and enterprises to modernize their communications networks and provide secure real-time communications solutions to their customers and employees. Its solutions enable its customers with a secure way ...Full story available on Benzinga.com
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Ribbon Communications (NASDAQ:RBBN) reported fourth-quarter and full-year 2025 results that included record product and professional services bookings, but also revenue that fell short of management’s expectations due to customer and project delays. Executives said a number of large voice modernizat
Ribbon Communications (RBBN) delivered earnings and revenue surprises of 0% and 2.47%, respectively, for the quarter ended March 2024. Do the numbers hold clues to what lies ahead for the stock?