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Sonic Foundry Touches New 52-Week High

Zacks Equity Research

Shares of Sonic Foundry Inc. (SOFO) reached a new 52-week high of $11.43 on Jun 13, 2013. Sonic Foundry shares have gained from product enhancements, its share repurchase program and solid second-quarter 2013 results announced on Apr 25.

The closing price of this application software-maker on Jun 11 was $11.20, representing a robust 1-year return of about 60.0% and year-to-date return of about 83.3%. Average volume of shares traded over the last three months stands at approximately 9,973K. The company’s market cap stands at $43.9 million.

Moreover, Sonic Foundry carries a Zacks Rank #1 (Strong Buy) and has an Earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) of +23.1%.

Growth Drivers

Web communications and content management solution provider Sonic Foundry is widely known for its Mediasite webcasting platform. The platform enables online information sharing, webcasts and also improves learning outcomes and overall performance of users.

Recently, Sonic Foundry added some advanced features to its Mediasite Enterprise Video Platform, which helps in uploading, managing and distributing all video-based content. With the newly-added features, users will be able to capture multiple video signals and stream two or more videos at a time, automatically extract video content from different sources, search any content using specific keywords from the huge media library, share video content and upload video content from mobile phones.

Sonic Foundry also announced a share repurchase program, through which it can buy back $1.0 million shares of its common stock. However, the company did not mention any time limit  for the repurchase.

On Apr 25, 2013, Sonic Foundry reported its second quarter earnings per share of 5 cents, which was 171.4% higher than the Zacks Consensus Estimate of 7 cents loss per share. The earnings beat could be attributed to the 8.5% revenue growth and cost optimization measures.


In today’s world, efficient communication is critical for better education, policy/decision making and business growth. Sonic Foundry’s flagship Mediasite takes good care of this requirement across organizations, educational institutions and government departments. As importance of communicating, sharing and using information will continue to grow with the passage of time, we expect demand for Sonic Foundry’s products to ramp.

We are also positive about the company’s decision to return shareholder value through share buybacks as this will boost earnings and investor loyalty, going forward.

Other Stocks to Consider

Other stocks in the technology industry that are currently performing well and have solid visibility include AVG Technologies (AVG), Constant Contact Inc. (CTCT) and DTS Inc. (DTSI), all of which have a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on DTSI

Read the Full Research Report on CTCT

Read the Full Research Report on SOFO

Read the Full Research Report on AVG

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