On Wednesday, B.Riley raised the price target for AudioEye (NASDAQ:AEYE) shares to $14 from the previous $10, while maintaining a Buy rating on the stock. The firm's analyst cites the Department of Justice's final rule on Title II of the Americans with Disabilities Act (ADA) as a key factor that could drive significant demand for AudioEye's services in fiscal year 2025 and beyond.
The company is expected to release its first-quarter 2024 results after the market close on Tuesday, April 23. The analyst forecasts first-quarter revenue and adjusted EBITDA at $8.1 million and $0.7 million, respectively, which is slightly different from the consensus of $8.0 million in revenue and $0.8 million in adjusted EBITDA.
The anticipation is that management will reiterate its previous guidance for fiscal year 2024, which includes approximately 9% year-over-year revenue growth and an adjusted EBITDA margin of roughly 11.7%.
The increase in the stock price target from $10 to $14 is based on an estimated fiscal year 2025 enterprise value to sales (EV/sales) multiple of approximately 4.25 times, up from the previous fiscal year 2024 EV/sales multiple of around 3.5 times. This adjustment reflects a growing confidence in AudioEye's accelerating revenue growth trajectory heading into fiscal year 2025.
InvestingPro Insights
As AudioEye (NASDAQ:AEYE) gears up to release its Q1 2024 financial results, the company's stock performance and financial health are under scrutiny. With the Department of Justice's final rule on the ADA potentially boosting demand for AudioEye's services, investors are keenly observing the company's metrics.
According to InvestingPro data, AudioEye boasts a robust gross profit margin of 77.73% for the last twelve months as of Q4 2023, underlining the company's efficiency in managing its cost of goods sold. However, the company is trading at a high Price / Book multiple of 16.27, which may indicate that the stock is quite expensive relative to its net assets.
Two InvestingPro Tips that stand out for AudioEye are the recent upward revisions of earnings by analysts for the upcoming period and the prediction that the company will be profitable this year.
These insights suggest a positive outlook for AudioEye's financial future. Additionally, the company has demonstrated strong returns over the last three months, with a 101.94% price total return, reflecting investor confidence and market momentum.
For investors seeking a deeper dive into AudioEye's potential, there are 11 additional InvestingPro Tips available that could provide a more comprehensive analysis. To access these tips and further enhance investment strategies, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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