Head-To-Head Analysis: AudioCodes (NASDAQ:AUDC) and Lumentum (NASDAQ:LITE)

AudioCodes (NASDAQ:AUDC) and Lumentum (NASDAQ:LITE) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for AudioCodes and Lumentum, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AudioCodes	1	0	1	0	2.00
Lumentum	1	3	10	2	2.81

AudioCodes presently has a consensus price target of $11.25, indicating a potential upside of 16.58%. Lumentum has a consensus price target of $84.93, indicating a potential downside of 6.17%. Given AudioCodes’ higher probable upside, equities research analysts clearly believe AudioCodes is more favorable than Lumentum.

Institutional & Insider Ownership

68.1% of AudioCodes shares are held by institutional investors. Comparatively, 94.1% of Lumentum shares are held by institutional investors. 48.8% of AudioCodes shares are held by insiders. Comparatively, 0.2% of Lumentum shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares AudioCodes and Lumentum”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AudioCodes	$242.18 million	1.18	$15.31 million	$0.56	17.23
Lumentum	$1.36 billion	4.62	-$546.50 million	($6.45)	-14.03

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

Risk & Volatility

AudioCodes has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Lumentum has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AudioCodes	7.11%	10.22%	5.82%
Lumentum	-29.87%	-8.69%	-1.98%

Summary

AudioCodes beats Lumentum on 8 of the 15 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 Lumentum

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables. It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers, such as argon-ion and helium-neon lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, solar cell processing, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.