Shares of Polycom (Nasdaq: PLCM) hit a 52-week low yesterday. Let's look at how it got here and see whether skies look clearer ahead.

How it got here
It's been an up and down year for Polycom, as earnings alternate between crushing expectations and falling short. As recently as January, the stock jumped after the company knocked its earnings report out of the park. But an early release last week revealed earnings well below estimates, causing a plunge that has led us to a new 52-week low.

Weak growth in the Asia-Pacific and North America regions were blamed for the shortfall this quarter. Competitors such as Cisco (Nasdaq: CSC)) and even 8x8 (Nasdaq: EGHT) are nipping at the heels of Polycom's video business. At a time when Google (Nasdaq: GOOG) and Microsoft's (Nasdaq: MSFT) Skype are offering free services, it's hard to grow share in video solutions.

How it stacks up
Polycom isn't the only company struggling in this space from a stock standpoint. Cisco is seen as a major competitor, but the company's stock has underperformed Polycom over the past five years.

EGHT Chart

EGHT data by YCharts

Right now, value is what shareholders are going to have to look for in Polycom. Despite the recent challenges, Polycom has had a record of strong growth over the past few years and is still very profitable. With ample cash on the balance sheet, the downside risk is fairly low.

Company

Total Cash

Total Debt

Price/Book

Forward P/E Ratio
Polycom $535 Million $0 1.8 10.6
Cisco $46.7 Billion $16.9 Billion 2.1 10.1
8x8 $21.9 Million $0 5.1 27.1

Source: Yahoo! Finance.

What's next?
Polycom has been up and down, so a single quarter's results shouldn't alarm investors. Growth is still expected to be between 6% and 8% in the disappointing first quarter -- not bad for a company trading at 10.6 times forward earnings.

What has me concerned is the competition from free sources such as Google and Skype. Many of the services Polycom offers are available for free elsewhere, and while business may be willing to pay for them now, in the future they may not. Polycom is starting to present a pretty compelling value when you look at the balance sheet, but I'm worried about slowing growth because of this competition. First-quarter revenue hasn't grown sequentially since at least 2009 -- not a great sign for the company.

Value hunters may start sniffing at shares, but I don't see a catalyst that drives shares higher until growth picks up.