Critical Analysis: AudioCodes (NASDAQ:AUDC) vs. Ooma (NYSE:OOMA)

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

Risk and Volatility

AudioCodes has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Ooma has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AudioCodes	5.66%	9.65%	5.45%
Ooma	-1.89%	2.72%	1.54%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AudioCodes	$242.18 million	1.06	$15.31 million	$0.45	20.16
Ooma	$256.85 million	1.23	-$6.90 million	($0.19)	-60.47

AudioCodes has higher earnings, but lower revenue than Ooma. Ooma is trading at a lower price-to-earnings ratio than AudioCodes, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

68.1% of AudioCodes shares are owned by institutional investors. Comparatively, 80.4% of Ooma shares are owned by institutional investors. 48.8% of AudioCodes shares are owned by company insiders. Comparatively, 9.9% of Ooma shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for AudioCodes and Ooma, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AudioCodes	1	0	1	0	2.00
Ooma	0	1	4	0	2.80

AudioCodes presently has a consensus target price of $11.25, suggesting a potential upside of 24.04%. Ooma has a consensus target price of $17.6250, suggesting a potential upside of 53.39%. Given Ooma’s stronger consensus rating and higher possible upside, analysts clearly believe Ooma is more favorable than AudioCodes.

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 Ooma

Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.