Contrasting Avaya (AVYA) and AudioCodes (AUDC)

Avaya (NYSE: AVYA) and AudioCodes (NASDAQ:AUDC) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Earnings & Valuation

This table compares Avaya and AudioCodes’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avaya $3.27 billion 0.74 -$182.00 million N/A N/A
AudioCodes $156.74 million 1.27 $4.03 million $0.31 23.23

AudioCodes has lower revenue, but higher earnings than Avaya.

Insider and Institutional Ownership

3.1% of Avaya shares are owned by institutional investors. Comparatively, 27.0% of AudioCodes shares are owned by institutional investors. 48.8% of AudioCodes shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Avaya and AudioCodes, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avaya 0 0 2 0 3.00
AudioCodes 0 1 2 0 2.67

Avaya currently has a consensus price target of $30.00, suggesting a potential upside of 35.44%. AudioCodes has a consensus price target of $8.00, suggesting a potential upside of 11.11%. Given Avaya’s stronger consensus rating and higher probable upside, analysts clearly believe Avaya is more favorable than AudioCodes.

Profitability

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

Net Margins Return on Equity Return on Assets
Avaya N/A N/A N/A
AudioCodes 3.19% 11.52% 6.30%

Summary

AudioCodes beats Avaya on 7 of the 10 factors compared between the two stocks.

About Avaya

Avaya Holdings Corp. operates as a holding company which through its subsidiary, develops business collaboration and communications solutions worldwide. The company was formerly known as Sierra Holdings Corp. The company was incorporated in 2007 and is based in Santa Clara, California. On January 19, 2017, Avaya Holdings Corp. filed a voluntary petition for reorganization under Chapter 11 in the US Bankruptcy Court for the Southern District of New York. It is in joint administration with Avaya Inc.

About AudioCodes

AudioCodes Ltd. designs, develops, and sells voice over IP (VoIP), converged VoIP, and data networking products and applications for enterprise unified communications, contact centers, service provider business services, mobile VoIP, and cloud virtualized data centers worldwide. The company's products include IP phones, session border controllers (SBC), media gateways, multi-service business routers, huddle room solutions, managed IP Phones, and survivable branch appliances; CloudBond 365, an adaptable solution for the data center; CloudBond 365 CCE appliances; User Management Pack 365, a software management application; VoIP management and routing, a suite of lifecycle applications for large scale cloud or premises-based unified communications deployments; MobilityPLUS, a mobile VoIP solution; VocaNOM call routing products; SmartTAP call recording products; Auto Attendant, a tool for managing inbound calls and delivery services; Fax Server, a tool for managing inbound and outbound enterprise fax transmissions; SIP Phone Support, a value-added application for SBC and gateways; signal processor chips; communications boards; and voice and data logging hardware integration board products. It also provides planning, implementation, operations, and support services, as well as consulting and training services. The company primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, system integrators and distributors, and network equipment providers in the telecommunication and networking industries. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.

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