Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of AudioCodes Soared Today

By Timothy Green - Apr 27, 2020 at 1:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A solid report and a reiterated outlook lit a fire under the stock.

What happened

Shares of AudioCodes (AUDC -0.27%) jumped on Monday after the provider of voice-networking and media-processing solutions reported its first-quarter results. AudioCodes beat analyst estimates for both revenue and earnings, and it said it remains on track to meet its targets for the second quarter and the full year. The stock was up 21.4% at 1:15 p.m. EDT today.

So what

AudioCodes reported first-quarter revenue of $52.0 million, up 11.7% year over year and about $1.2 million higher than the average analyst estimate. Services revenue was $17.7 million, up 25.2% from the prior-year period. The company saw strong demand related to the Microsoft Teams ecosystem and work-from-home practices.

A rising chart.

Image source: Getty Images.

Adjusted earnings per share came in at $0.25, up from $0.18 in the prior-year period and $0.02 better than analysts were expecting. The company produced operating cash flow of $6.8 million during the quarter, and it had cash, cash equivalents, and bank deposits totaling $74.2 million as of March 31.

AudioCodes did suffer some problems related to manufacturing its hardware products in China due to the pandemic, but the issues were short-lived. "We were able to quickly recover from the associated delay and were able to ship all of our products as planned during the quarter," CEO Shabtai Adlersberg said.

Now what

While there was some disruption during the first quarter, AudioCodes doesn't expect the pandemic to hurt its results. "Based on business activity during the 1Q 20 and past few weeks, we believe that we should be able to meet our original targeted performance plan for the full year and the second quarter," Adlersberg said.

Including Monday's rally, the small-cap stock is now up about 70% over the past year.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AudioCodes Ltd. Stock Quote
AudioCodes Ltd.
$21.84 (-0.27%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.