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Audiocodes (AUDC)
NASDAQ:AUDC
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Audiocodes
(NASDAQ:AUDC)
Rating:56Neutral
Price Target:
$9.00
▲( 0.33% Upside)
Positive Factors
Profitability
Increasing profitability metrics are seen as a positive.
Recurring Revenue
The company's transition to recurring revenue is seen as a strong potential growth area.
Strategic Positioning
AudioCodes remains uniquely positioned to capitalize on the Microsoft Teams Voice ecosystem through a strong competitive position in SBCs for these customers.
Negative Factors
Revenue Guidance
The company introduced F25 revenue/Adj. EBITDA guidance of $250MM (+3% y/y) and $36MM (+15% y/7).
User Growth
Teams total user growth has slowed at 320 million global users.
Audiocodes (AUDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$266.23M
Dividend Yield4.01%
Average Volume (3M)87.92K
Price to Earnings (P/E)15.9
Beta (1Y)1.31
Revenue Growth-1.13%
EPS Growth61.49%
CountryUS
Employees946
SectorTechnology
Sector Strength78
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.15
Shares Outstanding29,679,754
10 Day Avg. Volume46,601
30 Day Avg. Volume87,922
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)1.34
Price to Sales (P/S)0.00
P/FCF Ratio23.28
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue0.24
Enterprise Value/Gross Profit1.48
Enterprise Value/Ebitda2.63
Forecast
1Y Price Target
$10.75Price Target Upside19.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Audiocodes Business Overview & Revenue Model
Company DescriptionAudioCodes Ltd. is a leading provider of advanced communication software, products, and productivity solutions for the digital workplace. The company's offerings include VoIP (Voice over Internet Protocol) solutions, unified communications, and contact center solutions that enable enterprises and service providers to build and operate all-IP voice networks for delivering unified communications, contact centers, and hosted business services, whether in the cloud or on-premises.
How the Company Makes MoneyAudioCodes generates revenue primarily through the sale of its hardware products, such as session border controllers, media gateways, and IP phones, as well as software solutions related to voice networks and unified communications. The company also offers professional services, including consulting, support, and maintenance, which provide a recurring revenue stream. Key partnerships with major technology providers and network operators enhance AudioCodes' market reach and contribute significantly to its earnings. Additionally, AudioCodes capitalizes on the growing demand for cloud-based solutions and digital transformation in enterprises, which drives further adoption of its products and services.
Audiocodes Financial Statement Overview
Summary
Audiocodes demonstrates solid financial health with a strong balance sheet and effective cash flow management. The company faces challenges in revenue growth and operational efficiency, but maintains a low debt profile and stable profitability margins. Continued focus on improving revenue and operational efficiency could enhance overall financial performance.Income Statement
Audiocodes shows a relatively stable gross profit margin, with a slight decline in total revenue over the last couple of years. Gross Profit Margin for 2024 is approximately 65.3%. The company experienced a decline in revenue from 2023 to 2024 by about 0.9%, and a significant drop from 2022. Net Profit Margin improved from 3.6% in 2023 to 6.3% in 2024, indicating better profitability control. However, EBIT and EBITDA margins also reflect a decrease over the years, indicating operational efficiency challenges.65
Positive
Balance Sheet
Audiocodes maintains a solid equity position with an Equity Ratio of about 57.1% in 2024, indicating a strong capital structure. The Debt-to-Equity Ratio is 0.19, reflecting a low level of debt relative to equity, which reduces financial risk. However, Return on Equity (ROE) is moderate at 8%, reflecting room for improvement in generating income from equity.70
Positive
Cash Flow
Audiocodes has shown robust cash flow management with a strong Free Cash Flow to Net Income Ratio of 0.72, indicating effective cash generation from operations. Operating Cash Flow to Net Income is 2.3, highlighting efficient conversion of net income into cash flow. Free Cash Flow increased from the previous year, showcasing improvement in cash generation despite revenue challenges.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 242.18M | 244.38M | 275.09M | 248.92M | 220.77M | Gross Profit |
| 158.16M | 158.35M | 178.78M | 170.89M | 149.82M | EBIT |
| 17.19M | 14.42M | 31.32M | 39.52M | 38.35M | EBITDA |
| 21.07M | 18.53M | 34.30M | 41.96M | 40.62M | Net Income Common Stockholders |
| 15.31M | 8.78M | 28.47M | 33.75M | 27.25M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 62.38M | 38.20M | 41.91M | 80.09M | 41.38M | Total Assets |
| 335.90M | 337.52M | 323.83M | 349.27M | 358.12M | Total Debt |
| 36.46M | 39.28M | 13.72M | 19.53M | 29.81M | Net Debt |
| -22.29M | 8.74M | -10.81M | -59.89M | -11.12M | Total Liabilities |
| 144.09M | 149.41M | 134.07M | 143.77M | 148.27M | Stockholders Equity |
| 191.81M | 188.11M | 189.76M | 205.50M | 209.85M |
| Cash Flow | Free Cash Flow | |||
| 10.97M | 8.93M | 6.79M | 46.17M | 36.95M | Operating Cash Flow |
| 35.25M | 14.89M | 8.28M | 47.34M | 38.48M | Investing Cash Flow |
| 17.81M | 19.98M | -19.67M | 42.62M | -139.31M | Financing Cash Flow |
| -24.86M | -28.86M | -48.60M | -51.48M | 77.09M |
Audiocodes Technical Analysis
Neutral
8.97
Price Trends
9.21
Negative
9.94
Negative
9.66
Negative
Market Momentum
-0.11
Negative
49.19
Neutral
58.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AUDC, the sentiment is Neutral. The current price of 8.97 is above the 20-day moving average (MA) of 8.94, below the 50-day MA of 9.21, and below the 200-day MA of 9.66, indicating a neutral trend. The MACD of -0.11 indicates Negative momentum. The RSI at 49.19 is Neutral, neither overbought nor oversold. The STOCH value of 58.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AUDC.
Audiocodes Risk Analysis
Audiocodes disclosed 69 risk factors in its most recent earnings report. Audiocodes reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of AI. Q4, 2023
2.
The attack on Israel in October 2023, and the ensuing war with the Hamas terror organization and related conflicts with their supporters, could have a material adverse effect on our business, financial position, operating results and cash flows. Q4, 2023
Audiocodes Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $263.48M | 11.40 | 21.69% | ― | -14.48% | 46.79% | |
69 Neutral | $201.66M | 8.85 | 15.02% | ― | 11.94% | 377.86% | |
61 Neutral | $11.28B | 10.16 | -6.88% | 2.97% | 7.41% | -8.93% | |
60 Neutral | $256.33M | ― | -7.01% | ― | 4.52% | -20.60% | |
56 Neutral | $266.23M | 15.91 | 9.33% | 4.01% | -1.13% | 61.49% | |
47 Neutral | $286.60M | 50.30 | -24.21% | ― | -39.77% | -28.49% | |
45 Neutral | $253.12M | ― | -90.43% | ― | 65.68% | 50.28% |
* Technology Sector Average
Performance Comparison
AUDC
Audiocodes
8.97
-0.89
-9.03%
AEHR
Aehr Test Systems
8.85
-2.71
-23.44%
ASUR
Asure
9.44
1.79
23.40%
CRNT
Ceragon Networks
2.27
-0.37
-14.02%
CAN
Canaan
0.63
-0.37
-37.00%
OCFT
OneConnect Financial Technology
7.23
5.15
247.60%
Audiocodes Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: -3.34%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted steady revenue growth, increased interest in AI and cloud services, and robust cash flow. However, significant challenges include the impact of tariffs, pressures on margins, and delays in realizing revenue from conversational AI. While there are positive developments, the uncertainties and challenges balance out the achievements.Q1-2025 Updates
Positive Updates
Steady Revenue Growth
Revenues for Q1 2025 were $60.4 million, marking an increase of 0.5% from $60.1 million in Q1 2024.
Services Revenue Growth
Services revenues for the quarter were $32.6 million, up 3.4% over the previous year.
Increase in Net Income
Net income for Q1 2025 was $4 million, up from $2.1 million in Q1 2024.
Expansion in AI and Cloud Services
The company reported success in gaining interest from several large global system integrators for its conversational AI business.
Robust Cash Flow
Net cash provided by operating activities was $13.5 million for the first quarter of 2025.
Microsoft Teams Business Growth
The Microsoft Teams business grew 7% year-over-year.
Cisco WebEx Calling Expansion
Progress was made in certifying solutions for Cisco WebEx Calling Cloud Connect, expanding the potential for connectivity business.
Voice AI Business Growth
Voice AI business grew above 10% year-over-year, with a growing pipeline and increasing customer interest.
Negative Updates
Tariff Impact and Uncertainty
The company faced an estimated additional cost burden of $3 million to $4 million for the full year 2025 due to tariffs, leading to the withdrawal of annual guidance.
Decline in Non-GAAP Operating Income
Non-GAAP operating income for Q1 2025 was $5.4 million, down from $6.3 million in Q1 2024.
Gross Margin Pressure
Gross margin and profitability came lower than planned due to tariffs, increased R&D investment, and less favorable product mix.
Challenges in Conversational AI Revenue Realization
While there is strong customer interest in conversational AI, it takes time for opportunities to translate into actual growing recurring revenue.
Company Guidance
During the AudioCodes First Quarter 2025 Earnings Conference Call, the company reported revenues of $60.4 million, marking a 0.5% increase from the previous year. Service revenues grew by 3.4% to $32.6 million, accounting for 54% of the total revenues. Geographically, North America contributed 48% of the revenue, with EMEA, Asia Pacific, and Central and Latin America accounting for 34%, 14%, and 4%, respectively. The gross margin was 64.8%, and operating income reached $3.6 million, or 6% of revenues. Non-GAAP net income was $4.7 million, with non-GAAP operating income at $5.4 million, or 8.9% of revenues. The company highlighted a strategic pivot towards AI-powered voice services, noting a 25% year-over-year growth in Live managed services, which now represent $67 million in annual recurring revenue. Despite challenges such as new tariffs, which imposed a $350,000 cost burden, AudioCodes remains optimistic about its connectivity business and conversational AI initiatives, which are expected to drive future growth. The company did, however, withdraw its annual guidance due to ongoing tariff and macroeconomic uncertainties.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.