Audinate shares extend losses after profit warning
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The news: Audiovisual company Audinate extended losses on the ASX after warning that its full-year profit is expected to be lower than expected amid a number of headwinds.
The numbers: Audinate shares were down 4.02% to $8.60 by 2:05pm AEDT — marking the largest percentage fall across the ASX 200 — having shed 6.2% after its trading update on Tuesday.
Analysts made the following revisions to their ratings:
- Morningstar maintained its $18.50-per-share fair value estimate;
- Canaccord Genuity Capital Markets kept its 'buy' rating but slashed its target price from $12 to $10.50; and
- Morgan Stanley remained 'overweight' on Audinate with a $10.50 price target.
The context: Morgan Stanley said that while Audinate is making progress on adoption, the Q1 result exposed a high level of uncertainty in the business. The company's result was seen as a large shortfall compared to internal expectations when full-year guidance was issued in August.
Canaccord revised down its gross profits forecasts by 32% in FY25, 29% in FY26 and 29% in FY27 following the trading update.
Its analysts expect Audinate's share price to remain under pressure in the short term, with Canaccord's 'buy' thesis premised on a return to sustained growth in future periods.
The sources: Morningstar research, Morgan Stanley research, Canaccord Genuity Capital Markets research
