8 Most Undervalued Penny Stocks To Buy According To Analysts

4. Ribbon Communications Inc. (NASDAQ:RBBN)

Share Price: $3.20

Forward P/E: 13.38

Earnings Growth: 14.30%

Number of Hedge Fund Holders: 13

Analyst Upside: 87.50%

Ribbon Communications Inc. (NASDAQ:RBBN) is a technology company that specializes in communication systems. They create software and hardware that help companies make voice calls and send data securely. Moreover, the company also provides network solutions. Its key segments include Cloud and Edge Solutions, which deal with Voice over Internet Protocol, and IP Optical Networks which deal with high-performance networking solutions that manage large amounts of data traffic.

Although the revenue of Ribbon Communications Inc. (NASDAQ:RBBN) was down around 8.5% year-over-year at $193 million, its gross margins were up 2% during the same time. This is not the key highlight for the company. The main point of attraction is its multi-year partnership with Verizon, where the company will help Verizon replace outdated call-routing and networking systems using its cloud-based solutions. The partnership will add $300 million in sales for the company during the next 3 years. This will be a major improvement for a company like Ribbon Communications Inc. (NASDAQ:RBBN), whose annual revenue stands at less than $820 million.

RBBN is cheap at current levels with a forward price-to-earnings ratio of 13 and analysts expect its earnings to grow by 14%. It ranks as the 4th most undervalued penny stock to buy according to analysts.