Top Picks 2020: Altigen Communications (ATGN)

01/21/2020 5:00 am EST


Faris Sleem

Editor, The Bowser Report

Altigen Communications (ATGN) specializes in the design, delivery, and support of Voice over Internet Protocol (VoIP) phone systems and call center solutions, notes low-priced stock expert Faris Sleem, editor of The Bowser Report.

The company is a Silicon Valley-based Microsoft Independent Software Vendor (ISV) and Cloud Solutions provider. Over the past few years, Altigen has consistently generated increasing top and bottom line results.

The company’s recurring revenue business model promotes value creation with minimal risk and trailing twelve-month sales are up 27% since fiscal 2017, with cloud services revenue up 24% in fiscal 2019 alone.

Management has provided strong guidance for the upcoming year based on the company extending its service agreement with its largest strategic partner and acquiring the customer base of WorkSpace Communications, which will contribute to growth in the Microsoft UC space.

Higher top line results have largely dropped through to the bottom line as research and development and selling, general and administrative costs have largely remained flat. As a result, trailing 12-month operating income is up 379% compared to Fiscal 2017.

Reducing risk is Altigen’s strong balance sheet. The company operates with a current ratio of 2.7 and no long-term debt.

As long as Altigen Communication’s cloud services segment maintains growth and the company continues to make synergistic acquisitions by leveraging its $4 million in cash and strong debt position, it has a bright future ahead.

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