Image Source: UnsplashCrexendo (CXDO) — our latest company of the month — provides cloud communication platform and services, video collaboration, and managed IT services for businesses, notes Faris Sleem, editor of The Bowser Report, a leading advisory service focused on low-priced stocks.The stock has gained popularity over the past 11 months due to its ability to leverage its AI-powered cloud communications platform and the recent partnership with Oracle Cloud Infrastructure.Crexendo has achieved significant revenue and net income growth since 2020. New software subscribers and expanded partnerships are the key drivers for top line growth. The company has a track record of growing both organically and via acquisitions.Revenue and gross profit are both in strong upward trends, with trailing twelve month (TTM) revenue totaling $57 million. The company just became profitable within the past year, and it has TTM net income of $2.7 million. Crexendo has tripled the returns from the S&P 500 in the last five years.During that time, revenue and gross profit increased 247% and 216%, respectively. The company’s business model relies on recurring revenue and high profit margins to generate growth.Crexendo has a fantastic balance sheet with assets outweighing liabilities 5.2-to-1. Total debt of $1.6 million is low for an expanding company, and interest expense has decreased for the last four years. Its debt/equity ratio of just 3% is extremely low for the industry.The company has cash of $13.6 million and operating cash flow of $6.6 million. Its positive cash flows and high current ratio of 2.1 indicate minimal liquidity risk.The industry outlook is bullish as cloud communication platform and services demand remain elevated. Industry leaders are utilizing AI to improve operating efficiency and long-term profitability. Crexendo has also optimized its offerings by utilizing AI, including the addition of an AI assistant to build applications and generate custom scripts.Overall, Crexendo has a competitive advantage in a growing market. Its B2B recurring revenue business model, proprietary technology, and strong underlying fundamentals make the company poised for future growth.The shares are up 135% over the past year, making it vital to wait for a desirable entry point. Our long-term price target for Crexendo is $9 per share, making the ideal buying range $3.80-$4.50 per share.
About the Author
Faris Sleem is currently the editor of The Bowser Report and has many years of long-term investing experience. He actively researches micro-cap stocks and provides content for the newsletter. Mr. Sleem also a full time day trader and teaches retail investors how to trade for a living through his other business venture, Trade with Techs.He specializes in fundamental analysis for long-term investments and technical analysis for short-term investments. The Bowser Report is a monthly and weekly newsletter dedicated to finding high-quality stocks at low prices. Founded in 1976 by R. Max Bowser, the newsletter’s foundation is the Bowser Ratings System and Game Plan, which together help to identify winners early and maintain discipline.Beyond recommending stocks, The Bowser Report focuses on educating individuals in investment strategy to help them become better investors.More By This Author:Blue Chips In Water And Electric PowerBLK: Record Inflows, Double-Digit Revenue Growth In Q3TSLA: What to Do in the Wake of its “Disappointing” Robotaxi Day
