Audioeye AEYE shares have appreciated 259.9% over the trailing 12-month period, outperforming the Zacks Computer & Technology sector’s appreciation of 21.4% and the Zacks Internet-Software industry’s return of 33.1%.

AEYE shares have also outperformed its industry peers such as BILL Holdings BILL, Compass COMP and Gitlab GTLB. While BILL and COMP shares have appreciated 16.2% and 85.5%, respectively, GTLB shares have lost 12% over the trailing 12-month period.

The outperformance can be attributed to AEYE’s expanding digital accessibility solutions, rich partner base and accretive acquisitions.

AEYE Shares Beat Sector, Industry

Image Source: Zacks Investment Research

AEYE Drives Growth With New Partnerships

Audioeye’s expanding partner base has been a major growth driver for its success. AEYE’s customer count increased 18% year over year from 107,000 in the third quarter of 2023 to approximately 126,000 in the third quarter of 2024. This growth was driven by additions in both the Partner & Marketplace and Enterprise channels.

As part of its expansion strategy, the company made significant strides by growing its partnerships with key players in the education and public sectors. In the third quarter of 2024, AEYE expanded its partnership with Finalsite, a leader in K-12 school technology.

The goal of this partnership is to penetrate Finalsite’s installed base over the next three years, positioning AudioEye to tap into the growing K-12 school market. This expanded partnership is expected to drive substantial long-term revenue growth, further bolstering AudioEye’s position in the sector.

AEYE also extended its partnership with CivicPlus, a leader in public sector SaaS solutions, to introduce enhanced go-to-market strategies. This collaboration seeks to provide industry-leading accessibility solutions, positioning AudioEye to penetrate the local government market more effectively.

Expanding Portfolio Boosts AEYE’s Prospects

AEYE’s expanding portfolio has been a key catalyst. Recent products like Accessibility Protection Status and Accessibility Testing Software Kit offer customers a transparent risk assessment and enable developers to fix accessibility issues early in the software development cycle.

In November 2024, the company introduced Accessibility Protection Status, a new benchmark in digital accessibility compliance that offers businesses enhanced transparency, clarity, and control over their accessibility efforts. This benchmark moves beyond arbitrary scores to ensure clear compliance pathways.

In the third quarter of 2024, AEYE announced the general availability of its Accessibility Testing Software Development Kit, a self-service tool designed to help developers identify and address accessibility issues early in the software development life cycle.

Acquisitions have helped AEYE strengthen its product offerings and expand its customer base. AEYE’s acquisition of ADA Site Compliance strengthens its portfolio by adding a strong customer base and recurring revenues. It has enhanced the company’s ability to provide comprehensive digital accessibility solutions and integrate new clients seamlessly.

In addition to expanding its offerings through product portfolio and acquisitions, AEYE has also strengthened its security credentials. In the third quarter of 2024, AEYE announced it had achieved HIPAA Compliance and SOC 2 Type II Certification, further strengthening its data protection and security measures for enterprise-grade customers.

AEYE’s Earnings Estimates Trend Higher

The consensus mark for 2025 earnings is currently pegged at 69 cents per share, unchanged over the past 30 days. This figure indicates a year-over-year increase of 31.73%.

The Zacks Consensus Estimate for full-year 2025 revenues is pegged at $42.94 million, indicating 21.93% year-over-year growth. 

AEYE stock beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 83.57%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

AEYE Faces Financial Pressure in the Competitive Market

Despite expanding portfolio and partnerships, we expect prospects to remain muted, given the intense competition in the digital accessibility market from large technology companies and startups.

AudioEye is also experiencing challenges in managing operating expenses, which increased 9% in the third quarter of 2024 due to higher nonrecurring costs, such as litigation and business combination expenses. 

The company also reported a net loss of $1.2 million in the third quarter of 2024, reflecting the impact of increased sales and marketing costs and ongoing business expenses. These factors continue to put pressure on the company’s financial outlook, making it difficult to maintain momentum in a highly competitive industry.

What Should Investors Do With AEYE Stock?

AEYE stock is not so cheap, as suggested by the Value Score of F.

In terms of the forward 12-month Price/Sales, AEYE is trading at 5.15X, higher than the industry’s 3.13X.

Price/Sales (F12M)

Image Source: Zacks Investment Research

Currently, AEYE carries a Zacks Rank #3 (Hold), implying that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Compass, Inc. (COMP) : Free Stock Analysis Report

Audioeye, Inc. (AEYE) : Free Stock Analysis Report

BILL Holdings, Inc. (BILL) : Free Stock Analysis Report

GitLab Inc. (GTLB) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research