AudioCodes (AUDC) & EMCORE (EMKR) Critical Contrast

AudioCodes (NASDAQ: AUDC) and EMCORE (NASDAQ:EMKR) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Risk and Volatility

AudioCodes has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, EMCORE has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for AudioCodes and EMCORE, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AudioCodes 0 1 2 0 2.67
EMCORE 0 2 2 0 2.50

AudioCodes presently has a consensus price target of $7.75, indicating a potential upside of 4.73%. EMCORE has a consensus price target of $9.13, indicating a potential upside of 29.43%. Given EMCORE’s higher probable upside, analysts clearly believe EMCORE is more favorable than AudioCodes.

Institutional & Insider Ownership

22.1% of AudioCodes shares are owned by institutional investors. Comparatively, 77.5% of EMCORE shares are owned by institutional investors. 48.8% of AudioCodes shares are owned by insiders. Comparatively, 0.8% of EMCORE shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares AudioCodes and EMCORE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AudioCodes 11.84% 8.33% 4.75%
EMCORE 6.70% 9.30% 7.74%

Valuation & Earnings

This table compares AudioCodes and EMCORE’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AudioCodes $145.57 million 1.62 $16.23 million $0.54 13.70
EMCORE $122.89 million 1.56 $8.23 million $0.31 22.74

AudioCodes has higher revenue and earnings than EMCORE. AudioCodes is trading at a lower price-to-earnings ratio than EMCORE, indicating that it is currently the more affordable of the two stocks.

Summary

AudioCodes beats EMCORE on 8 of the 13 factors compared between the two stocks.

AudioCodes Company Profile

AudioCodes Ltd. designs, develops and sells Voice over-Internet Protocol (VoIP) and converged VoIP, and data networking solutions, products and applications that facilitate Unified Communications (UC) and Contact Center (CC) services. The Company categorizes its products and services into two main business lines: network and technology. Network products consist of customer premises equipment (CPE), gateways for the enterprise and service provider (or carrier) markets and of carrier-grade-oriented low- and mid-density media gateways for service providers and Enterprise Session Border Controls (ESBCs). Complementing its media gateways and session border gateways as network products are its multi-service business routers (MSBR), Internet Protocol (IP) phones, media servers, mobile VoIP solutions and value added application products. Technology products consist of its chips and boards business products. Its products are deployed in enterprise, service provider cloud networks.

EMCORE Company Profile

EMCORE Corporation is engaged in designing and manufacturing indium phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market. The Company focuses on linear fiber optic transmission technology. The Company operates through Fiber Optics segment. The Company provides optical components, and also end-to-end solutions for high-speed communications network infrastructures. The Company’s optical technologies are designed for cable television (CATV) and fiber-to-the-premise (FTTP) networks, telecommunications and data centers, satellite communications, aerospace and defense, wireless networks, and broadcast and professional audio/video systems. The Company’s fiber optics products enable information that is modulated on light signals to be transmitted, routed (switched) and received in communication systems and networks.

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