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On Thursday, H.C. Wainwright analyst Scott Buck revised the price target on AudioEye (NASDAQ:AEYE) shares, lowering it to $22 from the previous $37, while maintaining a Buy rating on the stock. The price target adjustment followed the company’s fourth-quarter 2024 and full-year results, which were announced after the market closed on Wednesday and aligned closely with analysts’ projections. According to InvestingPro data, the company maintains impressive gross profit margins of 78.9% and analysts expect net income growth this year. For deeper insights into AudioEye’s financial health and growth prospects, including 11 additional ProTips, consider exploring the comprehensive Pro Research Report.
AudioEye, which specializes in digital accessibility solutions, reported its performance and provided an outlook for 2025 that includes projected revenues of $41.0 million to $42.0 million and an adjusted EBITDA forecast of $9.0 million to $10.0 million. The expected adjusted EBITDA margins exceed 22% at the midpoint, showcasing the significant operating leverage present in the company’s business model. The company’s current revenue stands at $33.35 million, with InvestingPro analysis indicating the stock is currently overvalued based on its proprietary Fair Value model.
The firm’s growth prospects for 2025 are being fueled by various factors, including the anticipated impact of the European Accessibility Act. This legislation mandates that digital products and services, such as websites, e-commerce platforms, and mobile applications, adhere to set accessibility standards throughout the European Union. The act is set to come into force in June 2025. In preparation for this increased demand, AudioEye has expanded its European operations with the addition of account executives.
Additionally, AudioEye’s Board of Directors has approved a share repurchase program, authorizing the buyback of up to $12.5 million worth of common stock through 2027. This decision comes in the wake of a recent decline in the company’s share price, which peaked at $34.85 in November 2024 but has since fallen. H.C. Wainwright perceives this buyback as an appealing use of capital given the current valuation levels.
Despite the reduction in the price target, H.C. Wainwright’s analyst expressed a long-term optimistic view on AudioEye, citing confidence in the company’s strategy execution. However, the adjustment reflects a recalibration to accommodate the recent shift in investor sentiment.
In other recent news, AudioEye reported its fourth-quarter 2024 earnings, revealing an EPS of $0.18, which surpassed the forecast of $0.16. The company’s revenue for the quarter increased by 24% year-over-year to $9.7 million, although this was slightly below the expected $9.72 million. Despite the strong earnings performance, the stock experienced a decline in aftermarket trading. AudioEye’s gross margins improved to 80%, and the company achieved a record high adjusted EBITDA of $2.3 million for the quarter. Looking forward, AudioEye has set a revenue guidance range of $41-$42 million for 2025, indicating an 18% growth, with anticipated adjusted EBITDA of $9-$10 million. Analyst firm Needham maintained a Buy rating for AudioEye, with a price target of $25, following the company’s robust performance and growth prospects. Needham also highlighted the potential positive impact of ongoing digital accessibility mandates on AudioEye’s business. Additionally, AudioEye’s management has expressed caution regarding future economic challenges but remains optimistic about continued growth and profitability.
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