AudioCodes (NASDAQ:AUDC – Get Free Report) and Comtech Telecommunications (NASDAQ:CMTL – Get Free Report) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.
Analyst Ratings
This is a breakdown of current ratings and price targets for AudioCodes and Comtech Telecommunications, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AudioCodes | 0 | 2 | 0 | 0 | 2.00 |
| Comtech Telecommunications | 1 | 1 | 1 | 0 | 2.00 |
Comtech Telecommunications has a consensus target price of $2.50, indicating a potential upside of 44.09%. Given Comtech Telecommunications’ higher probable upside, analysts clearly believe Comtech Telecommunications is more favorable than AudioCodes.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AudioCodes | $245.60 million | 0.94 | $8.95 million | $0.26 | 36.81 |
| Comtech Telecommunications | $499.53 million | 0.10 | -$155.30 million | ($2.21) | -0.79 |
AudioCodes has higher earnings, but lower revenue than Comtech Telecommunications. Comtech Telecommunications is trading at a lower price-to-earnings ratio than AudioCodes, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
68.0% of AudioCodes shares are owned by institutional investors. 48.8% of AudioCodes shares are owned by insiders. Comparatively, 2.2% of Comtech Telecommunications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares AudioCodes and Comtech Telecommunications’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AudioCodes | 2.83% | 6.79% | 3.45% |
| Comtech Telecommunications | -5.52% | 9.77% | 1.05% |
Risk and Volatility
AudioCodes has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Comtech Telecommunications has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.
Summary
AudioCodes beats Comtech Telecommunications on 8 of the 13 factors compared between the two stocks.
About AudioCodes
AudioCodes Ltd. provides advanced communications software, products, and productivity solutions for the digital workplace worldwide. The company offers solutions, products, and services for unified communications, contact centers, hosted business services, Voice.AI, and service provider businesses. Its products include session border controllers, life cycle management solutions, VoIP network routing solutions, media gateways and servers, multi-service business routers, IP phones solutions, and value-added applications, as well as professional services. The company also offers One Voice Operations Center, a voice network management solution; Device Manager for administering business phones and meeting room solutions; AudioCodes Routing Manager for handling call routing in VoIP networks; and User Management Pack 365 simplifies user lifecycle and identity management across Microsoft Teams and Skype for Business deployments. In addition, it provides AudioCodes Live for Microsoft Teams, a portfolio of managed services for simplifying Teams adoption; appliances for Microsoft Skype/Teams for Business, such as survivable branch appliances, CCE, and CloudBond 365; and a range of value-added voice applications comprising SmartTAP, Voca, VoiceAI Connect, and Meeting Insights. Further, the company offers managed services; and AudioCodes Live Platform is a SaaS solution that enables service providers to offer their business customers a seamless migration to uCaaS solutions, such as Microsoft Teams and Zoom Phone. It primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, network equipment providers, and systems integrators, enterprises, carriers, and distributors in the telecommunications and networking industries. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.
About Comtech Telecommunications
Comtech Telecommunications Corp., together with its subsidiaries, engages in the provision of next-gen telecommunication solutions in the United States and internationally. The company’s Satellite and Space Communications segment offers satellite ground station technologies, services and system integration that facilitates the transmission of voice, video, and data over GEO, MEO and LEO satellite constellations, including solid-state and traveling wave tube power amplifiers, modems, VSAT platforms, and frequency converters; and satellite communications and tracking antenna systems, including high precision full motion fixed and mobile X/Y tracking antennas, RF feeds, reflectors, and radomes. This segment also provides over-the-horizon microwave troposcatter equipment that can transmit digitized voice, video, and data over distances up to 200 miles using the troposphere and diffraction, including the Comtech; and solid-state, RF microwave high-power amplifiers and control components designed for radar, electronic warfare, data link, medical and aviation applications, as well as engages in the procurement and supply chain management of electrical, electronic, and electromechanical parts for satellite, launch vehicle, and manned space applications. Its Terrestrial and Wireless Networks segment offers next generation 911 solutions, which includes emergency call routing, location validation, policy-based routing rules, logging, and security functionality; emergency services IP network transport infrastructure for emergency services communications and support; call handling applications for public safety answering points; wireless emergency alerts solutions for network operators; and software and equipment for location-based and text messaging services for various applications including for public safety, commercial, and government services. The company was founded in 1967 and is headquartered in Melville, New York.
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