MagicJack Advances Most Since 2010 as Outlook Beats EstimateGabrielle Coppola
MagicJack VocalTec Ltd., the Israeli company whose founders pioneered voice-over-Internet technology, jumped 20 percent in New York after it forecast 2014 sales that beat analysts’ estimates.
Shares of Netanya, Israel-based MagicJack climbed to $21.04 in New York, the highest since October 2012. Trading volume was almost nine times the average of the last 90 days, according to data compiled by Bloomberg. The stock extended this year’s gain to 77 percent, the biggest advance among the largest Israeli companies traded in New York.
Sales at MagicJack will grow 14 percent to as much as $163 million in 2014, Chief Executive Officer Gerald Vento said on a conference call yesterday. That compares with analysts’ average projection of $148 million. The company, which plans to release a new version of its free application for mobile phones next month, is betting it can boost sales by attracting more paying subscribers to the MagicJack device through the mobile application, Vento said.
“More closely tying the app to the core MagicJack product and service is beneficial in both directions,” Whitney Tilson, managing partner of New York-based hedge fund Kase Capital Management that owns more than 0.9 percent of the stock, said in a telephone interview today. “There’s a virtuous circle there that could drive a lot of growth in the company.”
MagicJack, which is jointly headquartered in Netanya and West Palm Beach, Florida, had 6.9 million registered application users, a 23 percent jump from the prior quarter, Vento said on yesterday’s call.
Canaccord Genuity Inc. raised a price estimate for MagicJack to $24 from $17, citing better earnings expectations for 2014 and a revamped marketing push, according to a report yesterday.