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TheStreet Open House

Why AudioCodes (AUDC) Stock Is Plummeting On Wednesday

NEW YORK (TheStreet) -- Shares of AudioCodes Ltd. (AUDC) are down -13.38% to $5.67 on Wednesday after the company reported a net income loss for the first quarter.

AudioCodes, which  develops and sells products for voice and data over packet networks, reported a GAAP-net loss for the 2014 first quarter was -$278,000, or 1 cent per diluted share, compared to net income of $71,000, or $0.002 per diluted share, for the same quarter in 2013.

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Revenue increased 11.4% over the year ago quarter to $36 million from $32.3 million.

TheStreet Ratings team rates AUDIOCODES LTD as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AUDIOCODES LTD (AUDC) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 10.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although AUDC's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. To add to this, AUDC has a quick ratio of 2.21, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for AUDIOCODES LTD is rather high; currently it is at 60.05%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, AUDC's net profit margin of 7.64% significantly trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, AUDIOCODES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $5.73 million or 30.44% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: AUDC Ratings Report
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