Is Vonage Holdings Corp. (VG) Running Out of Gas?

Vonage Holdings Corp. (VG) shares saw a recent bid of $6.91 and 1.63M shares have exchanged hands in the recent trading session, yielding a 0.73% gain over the past week. The stock price increased 0.88% or $-0.06 versus $6.85 at the end of the prior session. This change led market cap to move at $1.57B, putting the price -12.31% below the 52-week high and 53.56% above the 52-week low. The company’s stock has a normal trading capacity of 2.51M shares while the relative volume is 0.65.

To stay one step ahead we extended our research by comparing different price targets. The stock notched a 12-month high of $8.50 while $10.00 target is by far the most aggressive out of analysts who are currently evaluating the company, $1.5 higher than the next highest 52-week price estimate. The lowest 12-month price target for the shares is $6.50, which would be decrease of about -6% of its current value. The mean target of $8.50 should be compared with the price when the stock was languishing around $4.50 a share. And it remains to be seen which target price VG can achieve without sacrificing much as the company is holding a 49.89% gain for the past twelve months.

By historical standards, Vonage Holdings Corp. remains a cheap stock. The company’s current price-earnings ratio amounts to 99.68 times earnings, above the average P/E ratio of 67.76 times earnings. For now, Vonage Holdings Corp. is the toast of Wall Street as its ABR stands at 1.50 with 6 out of 11 analysts rating the stock a buy. Over the short term, some market observers may have noticed that Vonage Holdings Corp. has a 3.65% short float with 15 days to cover. It becomes significant when you consider how many shares are shorted versus the average daily volume, means how many days to cover those short shares at that volume. Vonage Holdings Corp. has far performed well this year, with the share price up 0.88% since January. Over the past 2 quarters, the stock is up 4.86%, compared with a gain of nearly 15.17% for 3 months and about 3.75% for the past 30 days.

Last time, the company shocked Wall Street by reporting EPS of $0.06, smashing the consensus of $0.05 per share. Revenue for the quarter also killed consensus, coming in at $243.35M, compared to the consensus of 242.41M. Nonetheless, from here on out, earnings per share forecasts for the current quarter are $0.06. The company is expected to report EPS as high as $0.07 and as low as $0.03 per share. Similarly, full-year EPS forecasts have ranged between $0.20 and $0.34. The mean EPS estimate is $0.27. On the other side, sales forecasts for the current quarter are $242.02M. The stock is expected to report revenue as high as $243.9M and as low as $234.8M per share. Similarly, full-year sales forecasts have ranged between $971.49M and $982.29M. The mean revenue estimate is $976.6M.

Over the last 5 years, Vonage Holdings Corp. has averaged a -46.10% YoY EPS growth rate and a 1.90% revenue growth rate. Analysts are expecting EPS growth rates to be at -31.10% this quarter and EPS estimate for next year reflect 3.69% growth rate.

Sell-side analysts also have something to say about this company. Needham analysts stated on 26/09/2016 that they maintained their Buy rating. Robert W. Baird analysts stated on 14/09/2016 that they launched coverage on this stock with Outperform rating. Dougherty & Company analysts stated on 12/09/2016 that they maintained their Buy rating. Dougherty & Company analysts stated on 03/08/2016 that they maintained their Buy rating.

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