AudioCodes Ltd. Just Beat Earnings Expectations: Here’s What Analysts Think Will Happen Next

There’s been a major selloff in AudioCodes Ltd. (NASDAQ:AUDC) shares in the week since it released its quarterly report, with the stock down 30% to US$7.85. Revenues were US$64m, approximately in line with whatthe analyst expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.15, an impressive 67% ahead of estimates. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analyst has changed their mind on AudioCodes after the latest results.

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Taking into account the latest results, the most recent consensus for AudioCodes from lone analyst is for revenues of US$262.9m in 2027. If met, it would imply a satisfactory 4.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 11% to US$0.38. Yet prior to the latest earnings, the analyst had been anticipated revenues of US$262.9m and earnings per share (EPS) of US$0.40 in 2027. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analyst did make a small dip in their earnings per share forecasts.

View our latest analysis for AudioCodes

Althoughthe analyst has revised their earnings forecasts for next year, they’ve also lifted the consensus price target 29% to US$12.50, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that AudioCodes is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.5% annualised growth until the end of 2027. If achieved, this would be a much better result than the 1.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. So although AudioCodes’ revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AudioCodes. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that AudioCodes’ revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

We don’t want to rain on the parade too much, but we did also find 2 warning signs for AudioCodes that you need to be mindful of.

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