William Blair Initiates NFV Pure Play RADCOM At Outperform

William Blair's Dmitry Netis initiated RADCOM Ltd. RDCM at Outperform with a 2017 EPS estimate of $0.45.

Netis was impressed with the company's focus on "riding the network functions virtualization (NFV) wave rather than following the current "hype." The analyst believed the NFV investment would pay off in the long run.

"According to Analysys Mason, the NFV market is expected to exit the R&D phase and enter the commercial deployment phase in 2018 at $2.4 billion, inflecting to $29 billion by 2023," said Netis.

Potential Partnership with AT&T

AT&T T was widely believed to be the company that signed a "multiyear $50 million contract earlier in this year for the use of its technology," according to the analyst. Additionally, AT&T planed to aim for "75% of its network to be virtualized by 2020, up from 5.7% in 2015," opening a door for a large potential profit window for RADCOM in the future.

Shares of RADCOM closed at $11.43, down 1.55 percent.