AudioCodes (AUDC) and DASAN Zhone Solutions (DZSI) Financial Review

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

Profitability

This table compares AudioCodes and DASAN Zhone Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AudioCodes 3.19% 11.52% 6.30%
DASAN Zhone Solutions 1.91% 6.78% 2.97%

Risk and Volatility

AudioCodes has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, DASAN Zhone Solutions has a beta of 3.69, meaning that its stock price is 269% more volatile than the S&P 500.

Insider & Institutional Ownership

25.3% of AudioCodes shares are held by institutional investors. Comparatively, 10.8% of DASAN Zhone Solutions shares are held by institutional investors. 48.8% of AudioCodes shares are held by company insiders. Comparatively, 65.3% of DASAN Zhone Solutions 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.

Valuation and Earnings

This table compares AudioCodes and DASAN Zhone Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AudioCodes $156.74 million 1.38 $4.03 million $0.31 25.10
DASAN Zhone Solutions $247.11 million 0.65 $1.07 million N/A N/A

AudioCodes has higher earnings, but lower revenue than DASAN Zhone Solutions.

Analyst Ratings

This is a breakdown of recent ratings and target prices for AudioCodes and DASAN Zhone Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AudioCodes 0 1 2 0 2.67
DASAN Zhone Solutions 0 0 0 0 N/A

AudioCodes presently has a consensus target price of $8.00, suggesting a potential upside of 2.83%. Given AudioCodes’ higher probable upside, equities research analysts clearly believe AudioCodes is more favorable than DASAN Zhone Solutions.

Summary

AudioCodes beats DASAN Zhone Solutions on 8 of the 12 factors compared between the two stocks.

AudioCodes Company Profile

AudioCodes Ltd. designs, develops, and sells voice over IP (VoIP), converged VoIP, and data networking products and applications for enterprise unified communications, contact centers, service provider business services, mobile VoIP, and cloud virtualized data centers worldwide. The company's products include IP phones, session border controllers (SBC), media gateways, multi-service business routers, huddle room solutions, managed IP Phones, and survivable branch appliances; CloudBond 365, an adaptable solution for the data center; CloudBond 365 CCE appliances; User Management Pack 365, a software management application; VoIP management and routing, a suite of lifecycle applications for large scale cloud or premises-based unified communications deployments; MobilityPLUS, a mobile VoIP solution; VocaNOM call routing products; SmartTAP call recording products; Auto Attendant, a tool for managing inbound calls and delivery services; Fax Server, a tool for managing inbound and outbound enterprise fax transmissions; SIP Phone Support, a value-added application for SBC and gateways; signal processor chips; communications boards; and voice and data logging hardware integration board products. It also provides planning, implementation, operations, and support services, as well as consulting and training services. The company primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, system integrators and distributors, and network equipment providers in the telecommunication and networking industries. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.

DASAN Zhone Solutions Company Profile

DASAN Zhone Solutions, Inc. provides network access solutions and communications equipment for service provider and enterprise networks worldwide. It offers broadband access products, including customer premise equipment, such as digital subscriber line (DSL) modems; Ethernet access demarcation devices; and gigabit passive optical network (GPON) and 10G point-to-point active Ethernet optical network terminals. The company also provides central office products, such as broadband loop carriers for DSL and voice-grade telephone service; DSL access multiplexers (DSLAMs); optical line terminals for passive optical distribution networks like GPONs; and 10G passive optical networks and 10G point-to-point active Ethernet. In addition, it offers Ethernet switching products; mobile backhaul products comprising standard Ethernet/IP or multiprotocol label switching interfaces; software defined networks and network function virtualization tools and building blocks; and passive optical LAN products consisting of integrated power over Ethernet units. The company was formerly known as Zhone Technologies, Inc. and changed its name to DASAN Zhone Solutions, Inc. as a result of merger with Dasan Network Solutions, Inc. in September 2016. The company was incorporated in 1999 and is headquartered in Oakland, California. DASAN Zhone Solutions, Inc. is a subsidiary of DASAN Networks, Inc.

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