Audinate shares fall on Macquarie downgrade
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The news: Macquarie downgraded its rating on audiovisual company Audinate due to softening end-user demand and negative earnings-per-share (EPS) momentum.
The numbers: Macquarie downgraded its rating on Audinate from 'outperform' to 'neutral' and cut its target price by 30% to $10.20.
It also lowered its EPS forecasts by 1,228% in FY25, 93% in FY26, 42% in FY27 and 25% in FY28.
Audinate shares fell 4.23% to $8.84 at market open and over the last 12 months has plunged 31.05%.
The context: Macquarie's analysts noted that softening end-user demand and a macro slowdown are likely to impede Audinate's performance in the short term. They said that the company's new product releases in the second half of the year are expected to drive half-on-half growth in FY25 gross profit, but will likely only support a "low-mid single-digit contribution" during the year.
Earlier this month, 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.
What they said: "Things are getting worse before they get better," Macquarie analysts said.
"While avoiding near-term downgrades, we still like the long-term story and see buying potential in FY25."
The source: Macquarie research
