Needham has reaffirmed a Buy rating on AudioCodes, keeping a $12.50 price objective after the company's fourth-quarter report. That target stands well above the current share price of $7.35, and the stock is trading close to its 52-week low; Fair Value analysis cited by market data indicates the shares appear undervalued at present.
AudioCodes delivered annual recurring revenue (ARR) of $79 million in Q4, an advance of 22% compared with the same period a year earlier. Needham highlighted that ARR expansion was broadly balanced between the firm's Voice AI offerings and its Connectivity segment, a pattern that aligns with trends seen in recent quarters.
The company remains profitable and reported a healthy gross profit margin of 65%. In addition, AudioCodes pays a dividend that yields 5.44% at current prices.
Needham identified several product lines that contributed to Voice AI ARR gains during the quarter. These include Voice.AI Connect, the LiveHub solution aimed at small and mid-size businesses, and Voca CIC for Teams Contact Center deployments.
The analyst noted a continued shift in AudioCodes' business model toward a larger share of recurring revenue. That transition is described as improving the underlying quality of revenue, and Needham reports that both visibility and the sales pipeline are stronger than they were a year ago.
Looking ahead to 2026, Needham expects the first quarter to represent the low point for both product and service revenue, with sequential gains anticipated through the remainder of the year. The firm also emphasized that the company is actively building pipeline tied to its recently expanded opportunity with Cisco Webex.
Overall, Needham's stance reflects confidence in AudioCodes' ARR trajectory and the benefits of a higher recurring revenue mix, while acknowledging near-term revenue seasonality with a projected Q1 trough and a focus on expanding channel opportunities.