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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of AudioCodes Ltd. (NASDAQ:AUDC), it is a financially-robust company with an impressive track record and an optimistic future outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on AudioCodes here.
Solid track record with excellent balance sheet
Over the past few years, AUDC has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. Not only did AUDC outperformed its past performance, its growth also surpassed the Communications industry expansion, which generated a 16% earnings growth. This is an notable feat for the company.
AUDC’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. AUDC seems to have put its debt to good use, generating operating cash levels of 0.7x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For AudioCodes, there are three pertinent factors you should look at:
- Valuation: What is AUDC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AUDC is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does AUDC return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AUDC as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AUDC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.