magicJack VocalTec Ltd.: Strong price momentum but will it sustain?

magicJack VocalTec Ltd. relative valuation is OVERVALUED and it has a fundamental analysis score of 44.

Our analysis is based on comparing magicJack VocalTec Ltd. with the following peers – AudioCodes Ltd., Internet Gold-Golden Lines Ltd., CenturyLink, Inc., Verizon Communications Inc., AT&T Inc., Vonage Holdings Corp., E. W. Scripps Company Class A, Barracuda Networks, Inc., TEGNA, Inc. and Palo Alto Networks, Inc. (AUDC-US, IGLD-US, CTL-US, VZ-US, T-US, VG-US, SSP-US, CUDA-US, TGNA-US and PANW-US).

magicJack VocalTec Ltd. has shown overwhelming performance over the last one year at 25.82%. But over the last month performance has declined by -4.97%. In fact, magicJack VocalTec Ltd.’s monthly share performance has also lagged its overall peer group (median share price performance was 0.65 last month).

Company Snapshot

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It currently trades at a Price/Book ratio of (3.43).
  • The market expects CALL-US‘s earnings to grow at about the same rate as its chosen peers and also does not seem to expect much improvement in its below peer median returns.
  • CALL-US has relatively low profit margins and median asset efficiency.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, CALL-US‘s return on assets has eroded from above median to below median among its peers suggesting declining relative operating performance.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • While CALL-US‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • CALL-US currently does not have any debt.
  • Our analysis rates magicJack VocalTec Ltd. as OVERVALUED relative to its peers.

Share Price Performance

With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.

CALL-US‘s change in share price of 25.82% for the last 12 months is better than its peer median. However, the 30-day trend in its share price performance of -4.97% is below the peer median suggesting that the company’s recent performance has faded significantly relative to peers.

Share Price Performance

Quadrant label definitions. Hover to know more

Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

magicJack VocalTec Ltd.’s price of USD 7.65 is greater than CapitalCube’s implied price of USD 6.28. At this level, CapitalCube believes that magicJack VocalTec Ltd. is overvalued. Over the last 52 week period, the stock has fluctuated between USD 5.27 and USD 8.90.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

magicJack VocalTec Ltd. engages in the provision of cloud communications and manufacture of communication devices. Its products and services include telephone home service and voice applications. The company operates and distributes under the following the magicJack PLUS, magicJack EXPRESS and magicJack GO brands. magicJack VocalTec was founded in 1989 and is headquartered in Jerusalem, Israel.

Disclaimer

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