Audinate shares 'materially undervalued': Morningstar
Make us a preferred source
Make us a preferred source on Google
More news: Audinate continued to lead declines on the ASX after flagging lower-than-expected full-year profit, with shares down 7.3% to $8.84 by 1:30pm AEDT.
However, Morningstar maintained its fair value estimate of $18.50 for the audiovisual tech company following the company's first-quarter update.
What they said: "Although the update is a further disappointment, we, like management, expect fiscal 2025 to be a transition year for the company and expect growth to reaccelerate from fiscal 2026," Morningstar analyst Roy Van Keulen said.
"At current prices, Audinate shares screen as materially undervalued, as the market appears to believe the company's current slowdown may signal a loss of competitive position or exhaustion of its addressable market."
Audinate shares tumble on full-year profit warning
More news: Audinate shares was the worst performing ASX 200 stock in early trading after the audiovisual tech company flagged that full-year profit will be lower than expected as it faces a number of headwinds.
Audinate shares were down 8.8% to $8.70 by 11am AEDT, having fallen more than 45% since the turn of the year.
Audinate flags lower profit for FY25 amid headwinds
The news: Audiovisual tech company Audinate has warned full-year profit is expected to be lower than expected amid a number of challenges.
The numbers: Audinate reported a gross profit of USD7.2 million ($10.8 million) for the September quarter, down from $10.6 million a year ago.
The company, which had already flagged a slightly lower profit in FY25 compared to FY24, on Tuesday said it will not achieve this target amid headwinds.
The context: Audinate, the developer of the Audio over Ethernet (AoE) system Dante, said the Q1 performance reflected several challenges including shorter order lead times, increased inventory across the industry, slower clearance of raw material inventories by our manufacturing customers, and softer-than-expected demand from end-users.
These headwinds are expected to continue into the second quarter, with a Q2 gross profit run rate in line with Q1 FY25, it told investors ahead of the annual general meeting later on Tuesday.
The company is anticipating a moderately stronger second half, but said FY25 remains a transitional year as its manufacturing customers work through inventory, and the company awaits recovery in end-user demand to drive future orders.
The source: ASX announcement
