magicJack VocalTec Ltd Tanks On Canaccord Genuity Downgrade And Weak Results

Shares of magicJack VocalTec Ltd CALL fell drastically on Tuesday, following the worse-than-expected third quarter results the company declared after market hours on Monday.

Moreover, analysts at Canaccord Genuity dropped their target price on the company’s shares to $12 from $14 in a report issued on Tuesday morning, which contributed to the decline of the stock. MagicJack reported revenue of $25.8 million, well below Wall Street's consensus estimate of $27.48 million.

Non-GAAP earnings per share (EPS) were $0.18, a significant decline from non-GAAP EPS of $0.72 that it reported in the same quarter last year.

MagicJack is an Israel-based company that invented Voice over IP (VoIP) and sells various VoIP products. On October 13, analysts at Zacks upgraded the company’s stock to ‘Neutral’ from ‘Underperform’ with a price target of $9.10. On September 23, analysts at Sidoti initiated coverage on the stock, rating it ‘Buy’ with a price target of $19.

Related Link: magicJack Reports Q3 2014 Financials

In its earnings call on Monday, Gerald Vento, President & CEO of magicJack VocalTec, highlighted that the company is excited by opportunities in international sales with Telefónica and a new domestic business service it will launch in 2015.

“We made good progress as the magicJackGO device had it's first partial quarter of sales," he said, adding: "Activations grew from a 165,000 last quarter to a 175,000 for this quarter...We installed side kick displays in approximately 600 store...For October we sold 84,000 devices in retail."

Vento concluded: “We remain by far the best value in the consumer voice market and consistently reinforce that message both in our in-store merchandising and advertising campaigns."