Spirent Communications (OTCMKTS:SPMYY) and AudioCodes (NASDAQ:AUDC) Critical Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spirent Communications	N/A	N/A	N/A
AudioCodes	3.65%	6.46%	3.50%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spirent Communications	0	0	0	0	0.00
AudioCodes	0	2	1	0	2.33

AudioCodes has a consensus target price of $12.50, indicating a potential upside of 57.83%. Given AudioCodes’ stronger consensus rating and higher probable upside, analysts plainly believe AudioCodes is more favorable than Spirent Communications.

Dividends

Spirent Communications pays an annual dividend of $0.16 per share and has a dividend yield of 1.5%. AudioCodes pays an annual dividend of $0.40 per share and has a dividend yield of 5.1%. AudioCodes pays out 129.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

68.1% of AudioCodes shares are held by institutional investors. 1.0% of Spirent Communications shares are held by company insiders. Comparatively, 48.8% of AudioCodes shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Spirent Communications and AudioCodes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spirent Communications	$460.20 million	3.37	$12.90 million	N/A	N/A
AudioCodes	$245.60 million	0.92	$8.95 million	$0.31	25.55

Spirent Communications has higher revenue and earnings than AudioCodes.

Volatility and Risk

Spirent Communications has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, AudioCodes has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Summary

AudioCodes beats Spirent Communications on 10 of the 14 factors compared between the two stocks.

About Spirent Communications

Spirent Communications plc provides automated test and assurance solutions in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company operates through Lifecycle Service Assurance, and Networks & Security segments. The Lifecycle Service Assurance segment offers lab-based testing solutions for 5G mobile core networks, and cellular and Wi-Fi devices, as well as live solutions. This segment also provides lab and test automation solutions for the telecom industry and enterprises. The Networks & Security segment develops test methodologies, tools, and services for virtualised networks, cloud, and artificial intelligence networking infrastructure, as well as application performance and proactive security validation. This segment also offers Ethernet/internet protocol performance testing solutions, as well as navigation satellite system test and simulation solutions while addressing opportunities in the broader positioning, navigation, and timing market, including low earth orbit satellites and autonomous vehicles. The company was formerly known as Spirent plc and changed its name to Spirent Communications plc in May 2006. Spirent Communications plc was founded in 1936 and is headquartered in Crawley, the United Kingdom.

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.