Ceragon Networks Ltd. (CRNT)

Akhil Kolluri & Mihir SrivastavaTJ Investment Club

4/8/2011

Background

•Networking company that provides wireless solutions to service providers•Customer base of 150 service providers•100 countries•Headquartered in Tel Aviv, Israel•Founded in 1996

What They Do

•Wireless backhaul solutions•Voice and premium data services•FibeAir® product line•Decrease capacity bottleneck•Next generation IP networks

FibeAir

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Solutions

• Rural broadband• WiMAX backhaul• Government/Public safety• Enterprise/Private networks• Next-gen networks (e.g., 4G) • LTE-Ready mobile backhaul• Mobile Architecture for Service

Transport (MAST™)

US Presence

• New Evolution IP-10 CLH systemo Optimized for North America

• North American Management Team • Office in NJ

SRI

• Ceragon's Quality Policy• Ceragreen - certificate of environmental protection• New FibeAir products are zero footprint

Competition

• DragonWave (DRWI)oNot as largeoLimited distributionoLess diverse customers

Numbers

•Current Price: 11.59•52 week: 6.88 - 14.34 •Mkt cap: 387.53M •P/E: 30.14 •EPS: 0.38 •Beta: 1.38 •As of 2:30 PM April 6, 2011

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The "Bad" Stuff

• Cut 200 jobso to acquire Nera Networks 

• Low margins • High P/E

Recommendation

•Buy Market: $11.54•Sell: $15.50

Reasons to Buy

•5 star CAPS rating•Recently released Evolution IP-10 CLH system•Networking industry expanding•New technology •Q1 earnings release May 16•Given moderate buy, buy, or strong buy ratings

Reasons to Buy

• Compound annual growth rate (CAGR) 23.3% over last four years despite volatility

• Emerging marketso No ceiling for growth o Asia/Pacific

India• Acquisition of Nera

o Short-waveo Long-term benefits

• Customers in developed AND emerging nations

Analyst Ratings

• Outperform ratingo Oppenheimer

• Overweight ratingo Barclays Capitalo Brean Murray

• Given "Buy" or "Strong Buy" by many

Citations• http://www.google.com/finance?q=NASDAQ:CRNT• http://www.ceragon.com/na/default.asp• http://en.wikipedia.org/wiki/Ceragon• http://caps.fool.com/Ticker/CRNT.aspx • http://www.ceragon.com/ • http://www.americanbankingnews.com/2011/04/06/ceragon-networks-ltd-crnt-given-

outperform-rating-by-oppenheimer-opy-analysts/ • http://finance.yahoo.com/q/ao?s=CRNT+Analyst+Opinion • http://www.ceragon.com/news_item.asp?ID=245 • http://www.fool.com/investing/small-cap/2010/12/03/time-to-sell-ceragon-networks.aspx• http://seekingalpha.com/article/258502-ceragon-networks-a-telecom-diamond-in-the-rough?

source=TheMotleyFool• http://www.selcoms.com/products/images/ceragon/Carrier%20Ethernet%20Systems/FibeAir-

IP10.png • http://finance.yahoo.com/news/Ceragon-Networks-cutting-apf-4173917631.html?x=0&.v=1