Clearfield (NASDAQ: CLFD) and AudioCodes (NASDAQ:AUDC) 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, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Insider & Institutional Ownership

29.0% of Clearfield shares are owned by institutional investors. Comparatively, 22.1% of AudioCodes shares are owned by institutional investors. 18.5% of Clearfield shares are owned by company insiders. Comparatively, 48.8% of AudioCodes shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Clearfield 5.20% 5.95% 5.50%
AudioCodes 11.84% 8.33% 4.75%

Analyst Ratings

This is a summary of current ratings and target prices for Clearfield and AudioCodes, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clearfield 0 0 2 0 3.00
AudioCodes 0 1 2 0 2.67

Clearfield presently has a consensus target price of $15.50, suggesting a potential upside of 23.02%. AudioCodes has a consensus target price of $7.75, suggesting a potential upside of 4.03%. Given Clearfield’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Clearfield is more favorable than AudioCodes.

Earnings & Valuation

This table compares Clearfield and AudioCodes’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Clearfield $73.95 million 2.35 $3.84 million $0.28 45.00
AudioCodes $145.57 million 1.63 $16.23 million $0.54 13.80

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

Volatility & Risk

Clearfield has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, AudioCodes has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Summary

Clearfield beats AudioCodes on 7 of the 13 factors compared between the two stocks.

About Clearfield

Clearfield, Inc. manufactures, markets and sells fiber management and enclosure platform that consolidates, distributes and protects fiber as it moves from the inside plant to the outside plant and all the way to the home, business and cell site. The Company’s products include Clearview Cassette, which is the building block of its product platform; Connectivity and Optical Components; FieldSmart, which is a series of panels, cabinets, wall boxes and other enclosures that house the Clearview components; FieldShield, which is a fiber delivery method for broadband deployment; CraftSmart, which is a line of optical protection field enclosures, and Cable Assemblies. Its products are sold across broadband service providers, including traditional telephone companies, competitive local exchange carriers, multiple service operators (cable television), wireless service providers, and municipal-owned utilities that utilize fiber in their service offerings to businesses and consumers.

About AudioCodes

AudioCodes Ltd. designs, develops and sells Voice over-Internet Protocol (VoIP) and converged VoIP, and data networking solutions, products and applications that facilitate Unified Communications (UC) and Contact Center (CC) services. The Company categorizes its products and services into two main business lines: network and technology. Network products consist of customer premises equipment (CPE), gateways for the enterprise and service provider (or carrier) markets and of carrier-grade-oriented low- and mid-density media gateways for service providers and Enterprise Session Border Controls (ESBCs). Complementing its media gateways and session border gateways as network products are its multi-service business routers (MSBR), Internet Protocol (IP) phones, media servers, mobile VoIP solutions and value added application products. Technology products consist of its chips and boards business products. Its products are deployed in enterprise, service provider cloud networks.

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