Goldman Sachs is joining the long list of investment houses that are turning jittery about

AudioCodes

(Nasdaq:AUDC) for 2001.

Analysts Elan Zivotofsky and Shimon Levy reiterated the bank's Buy rating for AudioCodes but slashed their 2001 revenue forecast from $124 million to $106 million. They also lowered 2001 earnings per share from 92 cents to 80 cents, and cut AudioCodes' price target to $35. The target is still a hefty 230% higher than the company's market price. But investors punished the company, which saw its stock sink by 21% to $10.7 on January 2.

Goldman's revenue forecast is in line with the report published last week by Prudential Securities, which predicted that AudioCodes' 2001 revenue will come to $125 million. Prudential slashed the Yehud, Israel-based company's target from $50 to $30.

To recap, investment houses were prompted to downgrade AudioCodes after its VoIP rival

Natural MicroSystems

(Nasdaq:NMSS) released a warning a month ago. UBS Warburg lowered AudioCodes' target by 70% to $27, and Merrill Lynch hacked the target by 74% to a low $21.

Goldman Sachs' report does not refer directly to Natural MicroSystems' warning. But clearly the downgrades AudioCodes suffered last month will affect the company's status in 2001. Investors apparently concur. AudioCodes' shares have shed 40% since Natural MicroSystems released its warning.

Slump in the market, not at the company

Goldman Sachs explains that it downgraded AudioCodes because telcos are their spending. The bank retains its faith in AudioCodes' technological standing, especially in voice over packet chips and VoIP.

AudioCodes develops solutions to compress and transmit voice and data files. Its customer list includes

Clarent

(Nasdaq:CLRN),

Cisco Systems

(Nasdaq:CSCO) and

Alcatel CID

(formerly Newbridge Networks). But they might cut back on orders for AudioCodes products because of the predicted slowdown in the communications equipment market in 2001. AudioCodes might not feel the slump in the fourth quarter of 2000.

The analysts expect AudioCodes will meet revenue forecasts for the fourth quarter of 2000, which are revenue of $22.5 million and EPS of 18 cents. They predict 26% growth in 2001, and long-term annual growth of 40%.