EXFO (NASDAQ:EXFO) and AudioCodes (NASDAQ:AUDC) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.
Analyst Ratings
This is a breakdown of current recommendations for EXFO and AudioCodes, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
EXFO | 0 | 5 | 1 | 0 | 2.17 |
AudioCodes | 0 | 2 | 4 | 0 | 2.67 |
EXFO presently has a consensus target price of $3.8333, indicating a potential downside of 9.80%. AudioCodes has a consensus target price of $40.8333, indicating a potential upside of 43.33%. Given AudioCodes' stronger consensus rating and higher probable upside, analysts clearly believe AudioCodes is more favorable than EXFO.
Volatility and Risk
EXFO has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, AudioCodes has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.
Earnings & Valuation
This table compares EXFO and AudioCodes' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
EXFO | $265.58 million | 0.92 | $-9,540,000.00 | ($0.03) | -141.67 |
AudioCodes | $200.29 million | 4.70 | $3.98 million | $0.72 | 39.57 |
AudioCodes has lower revenue, but higher earnings than EXFO. EXFO is trading at a lower price-to-earnings ratio than AudioCodes, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares EXFO and AudioCodes' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
EXFO | -2.25% | -1.55% | -0.90% |
AudioCodes | 4.95% | 20.16% | 10.41% |
Insider and Institutional Ownership
10.9% of EXFO shares are held by institutional investors. Comparatively, 34.6% of AudioCodes shares are held by institutional investors. 20.0% of EXFO shares are held by company insiders. Comparatively, 48.8% of AudioCodes shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
AudioCodes beats EXFO on 12 of the 14 factors compared between the two stocks.