Introduction
Stocks Snapshot
As of 19thSeptember’ 2012, eOn Communications Corporation (NASDAQ:EONC) stock closed at USD 0.84. The stock has registered an average volume of 5,472 over the last three months. The market capitalization of the company stood at USD 2.42 million. The company is trading at a trailing P/S ratio of 0.10 and a P/B ratio of 0.45.The Enterprise Value to EBITDA ratio of the stock was recorded at 9.42
Financial Highlights
Revenue
For 9 months ended 30th April’ 2012 , USD 17.1 million in 2011 to 16.8 in 2012, representing an overall decline of approximately 1%. The major cause of the decline in net revenue was the decreased revenue from the Company’s eQueue, Millennium and CSPR product lines compared to previous year.
Gross Profit
For the 9 months ended 30th April’ 2012, the company recorded gross profit of USD 4.6 million compared to 5.0 million for the 9 months ended 30th April’ 2011; representing an overall decline of approximately 9%. The figure for 2011 included the impact of costs relating to software amortization; ignoring these costs the overall decline in gross profit due to the production mix is approximately 27%.
Selling General and administration expenses
During 9 months ended 30th September 2012, the selling, general and administration expenses of the company decreased approximately by 14% when compared to the same period last year mainly due to declines in subcontract, salaries and related expenses.
Net Income
For the 9 months ended April 30’2012 the company recorded net income per share of 0.11 compared to a net loss per share of USD 0.11 per share for the same period last year. However, the net loss per share for 2011 also included the loss of discontinued operations amounting to USD 0.08 per share.
Financial Position
As of 30th June 2012, the company had book value per share of USD 1.86 and cash value per share of USD 0.82. The cash value of the company represents cash balance of USD 2.4 million. The debt to equity ratio of the company stood at 60.59.
Outlook
Value investors should watch out for eOn Communications Corporation (NASDAQ:EONC) as it has lower relative valuation based on its price to sales and price to book ratios. The stock is also in a good market position based to capitalize on anticpaited recovery after the financial crisis.
