AudioEye Inc: Record Q4 Revenue Jettisons Onetime Penny Stock Higher

AudioEye Inc: Record Q4 Revenue Jettisons Onetime Penny Stock Higher
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AudioEye, Inc. Bullish as Demand for Digital Accessibility Grows

On New Year’s Eve, we published an article on tech penny stocks expected to perform well in 2019. Of the three we covered, all have been extremely bullish, with two climbing out of penny stock territory. And now, the third one is right on their heels.

AudioEye Inc (NASDAQ:AEYE) has had great momentum since the end of 2018. The software company ended the year trading at $7.95 and hit a new 52-week high of $12.40 on January, 23 for a short-term gain of 56%. AudioEye stock retreated slightly on short-term profit taking and market sentiment, but continues to trade near $10.90 per share.

Thanks to record fourth-quarter revenue and a strong outlook for 2019, AudioEye Inc continues to be an excellent tech stock worth keeping on your radar as the demand for digital accessibility continues to grow.

AudioEye Inc

Tucson, Arizona-based AudioEye Inc is a cloud-based accessibility company that helps those with disabilities better access the Internet, print, broadcast, and other media. By definition, this also means that it helps online brands reach a broader audience. One example would be controlling the Internet through voice commands. (Source: “About Us,” AudioEye Inc, last accessed February 21, 2019.)

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The company’s target audience is huge, including more than 41 million Americans, or 12.5% of the U.S. population, and more than one billion people globally.

AudioEye Stock Information
Market Cap $81.9 Million
Beta 1.49
52-Week Change 78.3%
52-Week High $12.40
52-Week Low $4.50
Shares Outstanding 7.6 Million
Float 3.2 Million
50-Day Moving Average $9.79
200-Day Moving Average $8.17

(Source: “AudioEye, Inc. (AEYE),” Yahoo! Finance, last accessed February 21, 2019.)

AudiEye stock, for the most part, was on an upward trajectory in the second half of 2018, at least until it—along with the rest of the market—took a beating in October and November.

Interestingly, AEYE stock wasn’t even remotely impacted when the markets took a dive in December. In fact, it started an upward move which has continued into 2019.


Chart courtesy of StockCharts.com

The reason for this bullish sentiment? On December 17, AudioEye provided a solid outlook for fiscal 2019. The company said it expects to report 2019 revenue in the range of $11.0 million and $13.0 million, which, at the midpoint, would be a 118.0% gain over the expected 2018 revenue of $5.5 million to $5.7 million. (Source: “AudioEye Introduces 2019 Revenue Guidance of $11 Million to $13 Million,” AudioEye Inc, December 17, 2018.)

2018 Was Another Record Year for AudioEye Inc

So, how did AudioEye do in 2018?

On January 22, the company reported its preliminary results for the fourth quarter and fiscal 2018. It expects fourth quarter revenue to be a record $1.78 million, a 103% increase over the $876,000 recorded in the same period a year prior. The projections also top the $1.73 million average estimates of analysts. (Source: “AudioEye reports 4Q revenue doubles to record $1.78M as demand for digital accessibility grows,” AudioEye, Inc., January 23, 2019.)

This will be the 12th consecutive quarter in which the company reports top-line revenue growth. Moreover, both deferred revenues and cash contracts in excess of revenues and deferred revenues continue to grow.

“The fourth quarter was a strong finish to yet another record year of financial performance and operational execution for our company,” said AudioEye Inc Executive Chairman Carr Bettis.

“Overall, AudioEye is in its strongest position to date and has a tremendous opportunity to capitalize on the market before us.”

For fiscal 2018, management expects to report record revenue of $5.66 million, which is more than double the amount recorded in 2017.

The company said that a growing number of legal cases related to accessibility has fueled the demand for its products. On top of that, companies are discovering the value of making their sites accessible to millions of new consumers.

AudioEye reiterated its previously announced financial guidance for 2019, expecting revenue of $11.0 million to $13.0 million. At the midpoint, that represents a 112% increase over preliminary unaudited revenue projections for 2018 of $5.7 million. It is also a 344% increase over the $2.7 million recorded in 2017.

The company plans to report its financial results for the fourth quarter and full year 2018 in early March.

Analyst Take

Investors kicked a large number of excellent tech stocks to the curb during the October sell-off and December meltdown.

This meant some great tech stocks dipped into penny stock territory. It also meant companies like AudioEye were trading at more attractive valuations. It was a solid tech stock before the fourth quarter sell off and continues to be one now.

AudioEye Inc, like the broader tech market, cannot continue growing at such a strong pace unabated. Because of market sentiment and profit taking, AEYE stock will experience some growing pains. But it will continue to be a great tech stock to watch in 2019.