Needham analyst Ryan Koontz maintained a Buy rating on Audiocodes (AUDC – Research Report) today and set a price target of $14.00.
Ryan Koontz has given his Buy rating due to a combination of factors that indicate potential for growth despite current challenges faced by Audiocodes. While acknowledging that the company’s transition from license sales to a subscription-based model has temporarily impacted growth, Koontz highlights the substantial year-over-year increase in Live subscription Annual Recurring Revenue (ARR) for Teams. This 45% growth, coupled with an 8% year-over-year increase in total Microsoft ecosystem revenues, suggests that Audiocodes is successfully building a recurring revenue model that could ensure long-term stability and growth.
Additionally, Koontz observes a 15% year-over-year growth in Customer Experience (CX) revenues, which could be seen as a sign of Audiocodes’s strengthening position in this segment. Although legacy gateway hardware sales are declining, Koontz believes that the negative impact of these legacy segments will be outweighed by the positive trends in newer areas of the business. Despite reducing the price target to $14 based on an extended recovery period, Koontz maintains a Buy rating, likely due to confidence in the company’s strategic shift and its potential to lead to increased profitability in the future.
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Audiocodes (AUDC) Company Description:
AudioCodes Ltd. engages in the development, manufacture, and marketing of products for transferring voice and data over the internet. Its products include products for Microsoft 365, session border controllers, multi-service business routers, internet protocol phones, digital and analog media gateways, management products and solutions, and voice applications. The company was founded by Shabtai Adlersberg in 1993 and is headquartered in Lod, Israel.
