On Monday (NASDAQ:MNDY), H.C. Wainwright maintained a Buy rating on AudioEye (NASDAQ:AEYE) shares and increased the price target to $37.00 from $28.00. This adjustment follows a significant 17.4% rise in the company's shares on Friday, outperforming the Russell 2000's modest gain of 0.7%.
AudioEye reported a record revenue of $8.9 million, aligning with forecasts, and provided a positive forecast for the fourth quarter of 2024. The company anticipates revenues to be in the range of $9.7 million to $9.8 million for 4Q24, indicating a 23.9% growth compared to the same period the previous year. This growth trajectory is expected to continue into 2025.
The analyst noted that AudioEye's business model, which boasts a high gross margin of approximately 80%, is set to deliver adjusted EBITDA margins nearing 25% in 2025, with potential for further increases in subsequent years.
The company's strategy of engaging in reseller partnerships within the K-12 education sector and small to medium-sized government agencies is expected to fuel double-digit growth rates for the foreseeable future.
Moreover, AudioEye has fortified its balance sheet through its At-the-Market (ATM) offering program, providing flexibility for potential mergers and acquisitions.
Despite a substantial year-to-date increase of 485.6% in AEYE shares compared to the Russell 2000's 18.4%, H.C. Wainwright believes there is still upside potential for the stock. The firm's optimism is based on AudioEye's financial profile, which is increasingly resembling that of leading SaaS companies that command higher revenue multiples.
In other recent news, AudioEye has reported robust financial growth in its third quarter of 2024 earnings call. The company experienced a 21% annualized increase in revenue, reaching $8.93 million, and a year-over-year increase of 14%.
An impressive adjusted EBITDA of $2 million, a 23% margin, was also reported. The company has adjusted its revenue projections for Q4 2024 to between $9.7 million and $9.8 million and raised its full-year guidance to $35.2 million to $35.3 million.
Strategic partnerships with Finalsite and CivicPlus, as well as the recent acquisition of ADA Site Compliance, are anticipated to significantly boost revenue growth and enhance AudioEye's product offerings. Despite a reported net loss in Q3 2024, there is an expected increase in market demand due to forthcoming accessibility mandates in Europe.
These recent developments reflect a promising outlook for AudioEye's financial health and future prospects, with management expressing confidence in the scalability of operations and potential for growth in EBITDA margins and revenue.
InvestingPro Insights
AudioEye's recent performance and positive outlook are further supported by real-time data from InvestingPro. The company's impressive gross profit margin of 78.87% in the last twelve months as of Q3 2024 aligns with the analyst's observation of high margins. This is complemented by an InvestingPro Tip highlighting AudioEye's "impressive gross profit margins."
The company's strong momentum is evident in its recent stock performance. InvestingPro data shows a remarkable 661.15% price total return over the past year, with a significant 46.2% return in just the last week. This aligns with the article's mention of the stock's outperformance and substantial year-to-date increase.
Looking ahead, an InvestingPro Tip suggests that "net income is expected to grow this year," which supports the positive forecast mentioned in the article. Additionally, the tip indicating that "2 analysts have revised their earnings upwards for the upcoming period" further reinforces the optimistic outlook for AudioEye.
For investors seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for AudioEye, providing a deeper understanding of the company's financial health and market position.
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