AUDC will beat the 18c consensus by two digits percentage surprise, just like last year.
Problem is visibility is Zero. Maybe that's good because by end Jan they still won't have a clew how the Q will end so with the good Q4 report they won't warn on Q1.
The current valuation takes most bad scenarios into account.
AUDC wasn't affected by the drop in CLRN orders in Q3 because CSCO became a 10% customer all off a sudden. CLRN orders should have returned to normal in Q4, if one is to believe CLRN management, so Q4 should be way beyond the reduced expectations. At $12, the stock is trading about 55-60 times Q4 earnings, and that's a P/E of 14-15 even if they don't grow in 2001.
bot @12 1/2 and 10 1/8 and preparing to load up more.
Strong points: Market leader in an explosive market, credible management, over $100MM in cash, beats analysts expectations every time.
Weak points: Zero visibility.
BTW,
When NMSS warned, AUDC reminded me of CHKP in the spring of '99 when its competitor warned and dropped 50 something percent, and CHKP dropped 30 something percent in sympathy although they said business as usual. That brought CHPK to a P/E of 14 or so, and from there the stock started a 2000% rally.
I don't expect AUDC to be that strong because the market environement is not the same, but unless something really bad happens, I expect it to come back the 40s (pre Q3 report) level in a few months.
ATG |
