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Up 400% since 2017: Here’s why the Audinate share price is going gangbusters

In ear monitors on a analog audio mixing console

The Audinate Ltd (ASX: AD8) share price is going gangbusters again today to hit a record high of $6.09 per share and it’s now up around 5x from its $1.22 per share initial public offer price back in June 2017.

Many readers won’t have heard of Audinate due to its relatively short life as a public company, but given the price action this looks a company worth investigating.

What does Audinate do?

Good question. Audinate’s key product is its Dante enabled audio equipment that improves sound quality when installed in standard audio equipment.

The company’s hardware and software allows professional audio equipment (speakers, mixers, mics, etc) to carry audio signals over a computer network, rather than using analog cables.

The advantage of this is that audio professionals can deploy audio solutions using existing computer networks instead of running analog cables throughout a building or venue.

Financially it’s producing a lot of strong organic growth, with revenue for the six-month period ending December 31 2018 up 60% to $14.2 million, which translated into a profit before tax of $0.7 million.

According to its latest regulatory filing the company has 57.2 million shares on issue to give it a market value of $348 million based on a share price of $6.09. In other words it now has a lot of growth baked into its valuation when we consider its latest financial update.

That’s not to say this company does not look to have a good future based on a decent competitive position, strong organic growth, and a respected management team.

Other up-and-coming small-cap shares to watch include Bravura Solutions Ltd (ASX: BVS), Superloop Ltd (ASX: SLC), or investors could even look to the U.S. emerging tech leaders such as Okta Inc.

Where to invest $1,000 right now

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*Returns as of February 15th 2021

Motley Fool contributor Tom Richardson owns shares in Okta. Inc.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and Bravura Solutions Ltd. The Motley Fool Australia has recommended SUPERLOOP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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