Vonage Holdings (NASDAQ: VG) shares have advanced from $5 above $14 in less than several months, and the current price stands around $13.6. According to technical analysis rules, Vonage shares could advance again above the $14 resistance, but the current share price does not represent a good value for long-term investors.
Fundamental analysis: Vonage Holdings continues to improve its position on the market
Vonage Holdings Corp was founded in 2001 as a provider of residential telecommunications services while today operates as a cloud communications provider. Vonage Holdings shares continue to trade in a bull market, and everything indicates that the price could reach again $14 resistance level.
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Vonage reported Q3 results in November; total revenue has increased by 4.7% Y/Y to $316M while Q3 GAAP EPS was -$0.04 (misses by $0.01). Total revenue has increased above expectations (beats by $8.3M), and the company continues to improve its position on the market.
“The company plans to increase investments in artificial intelligence, high-value API leadership, advancements in mobility, omnichannel capabilities, and expanding its addressable market while tailoring its go-to-market initiatives to reach and win more customers,” said Rory Read, Chief Executive Officer of Vonage.
Vonage and Xede have partnered recently to provide an optimized customer experience for financial services companies. “Xede’s expertise within the financial services industry, coupled with Vonage’s deep Salesforce integration, allows their customers to access key client data and insights,” said Robert Gavin from Vonage.
It is also important to say that a language education company “Wall Street English” selected Vonage to power its digital classroom platform for customers worldwide. There are also some obvious risks when it comes to investing in shares of this company; Vonage has a relatively large debt of $527M and faces high competition that could be a serious threat for future growth.
Morgan Stanley has raised its view on the cloud communications providers and said that Vonage shares are still undervalued relative to the market.
Vonage Holdings shares could again reach the $14 resistance if the US stock market doesn’t enter a correction phase. Despite this, my opinion is that there are certainly better long-term investment opportunities, even though Vonage continues to perform well in the current market environment.
Vonage Holdings is a stable company with good fundamentals, but the current share price is a little expensive and does not represent a good value for long-term investors.
Technical analysis: Bulls remain in control of the price action
Vonage shares could advance above the $14 resistance in the upcoming days, but if the stock market enters a correction phase, the stock price will be at much lower levels.
The critical support levels are $12 and $10; $14 and $15 represent the resistance levels. If the price jumps above $14 resistance, the next target could be around $15, but if the price falls below $10, it would be a firm “sell” signal and probably a sign of the trend reversal.
Summary
Vonage Holdings is a stable company that has increased revenues each year in the last five years, but with 3.3B market capitalization, shares of this company remain expensive. Vonage shares could advance above the $14 resistance in the upcoming days, but if the price falls below $10, it would be a firm “sell” signal and probably a sign of the trend reversal.
