Crexendo's Open Strategy Pays Off, Analyst Praises 'Disruptive Pricing Model'

Crexendo Inc (NASDAQ:CXDO) appears poised to gain share in the wholesale UCaaS (United Communications as a Service) market, according to Needham.

The Crexendo Analyst: Analyst Joshua Reilly initiated coverage with a Buy rating and price target of $8.

The Crexendo Thesis: The cloud communications company has an open platform strategy with pre-packaged features that have the "right balance of configuration" for both retail and wholesale customer wins. Reilly credits this for driving market share gains since the NetSapiens acquisition in 2021.

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The open platform has more than 240 integrations, which allows Crexendo to maintain a "disruptive pricing model" and focus on innovation, while its competitors struggle to maintain their customer bases, he added.

"In addition to winning net new licensee opportunities, we believe Crexendo intends to acquire and consolidate licensees at an intentional pace over time," the analyst wrote.

The company's non-GAAP operating margin is likely to expand in 2025 and beyond due to the ongoing growth in both telecom services and software solutions, he further stated.

Price Action: Shares of Crexendo had risen by 4.78% to $6.36 at the time of publication on Tuesday.

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