CounterPath Unified Communications solutions are changing the face of telecommunications. An industry and user favorite, Bria softphones for desktop, tablet and mobile devices, together with Stretto Platform™ server solutions, enable service providers, OEMs and enterprises large and small around the globe to offer a seamless and unified communications experience across any network. The Bria and Stretto combination enables an improved user experience as an overlay to the most popular UC and IMS telephony and applications servers on the market today. Standards-based, cost-effective and reliable, CounterPath’s award-winning solutions deliver high-quality voice and video calling, messaging, and presence offerings to our customers such as AT&T, Avaya, Bell Canada, BT, Liberty Global, Ribbon Communications, Uber and Vonex.
The image below shows some of Counterpath's clients.
The image below shows some of Counterpath's clients.
Overview of Counterpath's latest earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $2.573 million (down from $2.887 million from the same quarter of the previous year)
- Revenues declined by -10.9% over the last 12 months
- Total operating expenses: $3.258 million (down from $3.958 million for the same quarter of the previous year)
- Cost of revenues declined by -17.7% over the last 12 months
- Net income: $929 thousand (up from -$1.010 million for the same quarter of the previous year)
- Diluted earnings per share: -$0.16 (up from -$0.17 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 5.952 million (up from 5.932 million for the same quarter of the previous year)
- Cash and cash equivalents: $1.223 million
- Cash and cash equivalents per share: $0.205
- Cash and cash equivalents makes up 18% of Counterpath's market capital
- Cash and cash equivalents makes up 10.15% of Counterpath's total assets
- Accounts receivable: $1.672 million
- Trade accounts receivable makes up 13.89% of the Counterpath's total assets.
- Stockholders equity: $2.672 million
- Stockholders equity per share: $0.44
Counterpath's management commentary on the results and earnings guidance
“We continue to make significant progress growing our recurring revenue business, decreasing reliance on our legacy perpetual licensing model. Recurring revenue contributed 55% of total revenue in the quarter and grew 14% over the same quarter last year,” said David Karp, interim CEO, and CFO. “Contributing to this growth included the success of our channel partner program, which is now exclusively a Software-as-a-Service (SaaS) business for CounterPath. We have expanded our channel program breadth by leveraging our direct team and channel partners for opportunities that do not require customization. We have also introduced our collaboration solution in new markets. We have expanded our operations to support hosted collaboration with server infrastructure in North America, Europe and South Africa. The new deployments support our hosted cloud communications and collaboration services in these key markets to assist our channel partner roll-out. Our channel partner program allows CounterPath to leverage its sales force, particularly in regions where the company does not have a physical presence. Our focus on verticals and underserved markets provides higher margins that best align with CounterPath's quality, reliability, and platform interoperability. These opportunities include call center, retail, and health care verticals and the underserved SMB market for Unified Communications and Collaboration (UCC)."
Counterpath (NASDAQ: CPAH) stock price history
The image below, obtained from Google, shows the stock price history of Counterpath (NASDAQ:CPAH) for the last 5 years. And its been a shockingly bad time for Counterpath stockholders over the last 5 years. And its hard to believe that the stock traded at over $120 in 2004. Since then its been in constant decline and it doesn't look like there is much hope for the group or its stockholders. It is trading very close to its 52 week low and far away from its 52 week high which is a clear indication that short term sentiment and momentum of the stock is negative.
Counterpath (NASDAQ: CPAH) latest stock valuation
So based on Counterpath's latest earnings report and their constant stock price decline, what is the stock actually worth? Or asked differently is it worth anything at this point in time? It is always concerning when revenues are declining. And at to this the fact that losses continued to be made there is little to no hope. It is extremely hard to value a stock that has cash flow issues and that is making losses as most stock valuation models are based on earnings generated per share or cash generated from operations. When these are not available we tend to use stockholder equity per share as a base for our valuations. This shows what each stockholder would get per stock if the group sold all their assets (at the current value as shown on their balance sheet), paid of all their liabilities and distributed the rest to stockholders. So we value Counterpath stock at $0.44 and therefore believe the stock is overvalued and we would not recommend investors buy into the stock at its current price. And based on their stock price performance over the last 5 years (and in fact since 2004) we would advise investors to Avoid Counterpath shares.