AudioCodes (NASDAQ:AUDC – Get Free Report) and Allot (NASDAQ:ALLT – Get Free Report) are both small-cap technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Insider and Institutional Ownership
68.0% of AudioCodes shares are owned by institutional investors. Comparatively, 51.5% of Allot shares are owned by institutional investors. 48.8% of AudioCodes shares are owned by company insiders. Comparatively, 3.4% of Allot shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares AudioCodes and Allot’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AudioCodes | 2.83% | 6.79% | 3.45% |
| Allot | 9.40% | 9.64% | 5.99% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AudioCodes | 0 | 1 | 0 | 0 | 2.00 |
| Allot | 1 | 1 | 4 | 0 | 2.50 |
Allot has a consensus price target of $13.38, indicating a potential upside of 58.66%. Given Allot’s stronger consensus rating and higher probable upside, analysts clearly believe Allot is more favorable than AudioCodes.
Volatility and Risk
AudioCodes has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Allot has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.
Valuation and Earnings
This table compares AudioCodes and Allot”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AudioCodes | $245.60 million | 1.09 | $8.95 million | $0.26 | 42.65 |
| Allot | $101.99 million | 4.07 | $3.70 million | $0.22 | 38.32 |
AudioCodes has higher revenue and earnings than Allot. Allot is trading at a lower price-to-earnings ratio than AudioCodes, indicating that it is currently the more affordable of the two stocks.
Summary
Allot beats AudioCodes on 8 of the 14 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 Allot
Allot Communications Ltd. is a provider of leading innovative network intelligence and security solutions for service providers worldwide, enhancing value to their customers. Their solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot’s multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. Their industry leading network-based security as a service solution has achieved over 50% penetration with some service providers and is already used by over 20 million subscribers in Europe.
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