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small-cap

One NASDAQ- Listed Communication Stock at Support Levels- AudioCodes Ltd

Jun 08, 2023 | Team Kalkine
One NASDAQ- Listed Communication Stock at Support Levels- AudioCodes Ltd

AudioCodes Ltd 

AudioCodes Ltd (NASDAQ: AUDC) is an Israel-based software publisher. The Company provides communications software, end-to-end products and productivity solutions for the digital workplace. Company's solution's enables enterprises and service providers to build and operate all-IP voice networks for delivering unified communications, contact centres, and hosted business services, whether in the cloud or on premises.

Recent Financial Update:

  • AudioCodes (AUDC) reported a 10.8% year-over-year decrease in quarterly revenues, amounting to USD 59.2 million for the first quarter of 2023, compared to USD 66.4 million in the same period of 2022. However, quarterly service revenues showed a 10.8% year-over-year increase, reaching USD 30.5 million.
  • In terms of GAAP results, the quarterly gross margin was 61.7%, while the operating loss percentage was 1.4%. The net loss for the quarter stood at USD 0.2 million, or USD 0.01 per diluted share. On a non-GAAP basis, the quarterly gross margin was 62.1%, and the operating margin was 4.9%.
  • The non-GAAP net income amounted to USD 2.7 million, or USD 0.08 per diluted share.
  • Net cash provided by operating activities was USD 3.2 million for the quarter. AudioCodes declared a cash dividend of 18 cents per share, totaling USD 5.7 million, which was paid on March 7, 2023, to shareholders of record on February 21, 2023.
  • As of March 31, 2023, the company had USD 19.3 million available under court approval to repurchase shares and/or declare cash dividends.
  • The company's cash and cash equivalents, bank deposits, marketable securities, and financial investments totaled USD 121.5 million as of March 31, 2023, compared to USD 124.3 million as of December 31, 2022.

Technical Observation (on the daily chart)

The stock price has experienced a significant decline of 61.51% over the past year, indicating a persistent downward trend. This downward trend is also evident in the medium-term, with a correction of 48.89% in last six months. However, there are signs of potential support at the range of USD 7.00-USD 8.00, suggesting some upward movement. The momentum indicator RSI (14 period) currently stands at 48.79, recovering from oversold levels and moving upside, further suggesting the expectation of an upward momentum in the stock price. It is worth noting that the price is currently trading between both the 21-day and 50-day SMA trend-following indicators, and these SMAs will act as short-term support and resistances, respectively.

As per the above-mentioned price action, correction in the stock, and technical indicators analysis, a ‘Speculative Buy’ rating has been given AudioCodes Ltd (NASDAQ: AUDC), at the current price of USD 9.24, as of June 08, 2023, at 10:40 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 08, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.