Head to Head Review: AudioCodes (AUDC) and Inseego (INSG)

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

Risk and Volatility

AudioCodes has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Inseego has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Institutional and Insider Ownership

25.3% of AudioCodes shares are held by institutional investors. Comparatively, 12.1% of Inseego shares are held by institutional investors. 48.8% of AudioCodes shares are held by insiders. Comparatively, 4.1% of Inseego shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for AudioCodes and Inseego, as provided by MarketBeat.com.

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

AudioCodes presently has a consensus target price of $8.00, indicating a potential upside of 3.36%. Inseego has a consensus target price of $1.88, indicating a potential downside of 5.06%. Given AudioCodes’ stronger consensus rating and higher possible upside, analysts plainly believe AudioCodes is more favorable than Inseego.

Earnings & Valuation

This table compares AudioCodes and Inseego’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AudioCodes $156.74 million 1.41 $4.03 million $0.12 64.51
Inseego $243.55 million 0.47 -$60.57 million ($1.22) -1.62

AudioCodes has higher earnings, but lower revenue than Inseego. Inseego 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 AudioCodes and Inseego’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AudioCodes 2.57% 9.82% 5.50%
Inseego -30.71% N/A -24.17%

Summary

AudioCodes beats Inseego on 12 of the 14 factors compared between the two stocks.

About AudioCodes

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.

About Inseego

Novatel Wireless, Inc. is a provider of intelligent wireless solutions for the mobile communications market. The Company’s range of products includes intelligent mobile hotspots, universal serial bus (USB) modems, embedded modules, integrated asset-management and mobile tracking machine-to-machine (M2M) devices, communications and applications software and cloud services. It operates in the wireless communications industry in two product categories: M2M Products and Solutions, and Mobile Computing Solutions. M2M Products and Solutions includes its M2M embedded modules, integrated M2M communications devices, Ctrack fleet management platform and its service delivery platforms, Crossroads, DMS, the N4A DM and N4A CMS that provide device management and service enablement. Mobile Computing Solutions includes its MiFi brand of intelligent mobile hotspot devices, USB modems and embedded modules that enable Internet access and data transmission and services via cellular wireless networks.

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