AudioEye rises 36.7% after quarterly results show profit and stronger margins

What happened

AudioEye (AEYE) rose 36.7% on October 27, 2026, after reporting quarterly results that produced GAAP net income of $1 million and stronger profitability. The company reported third-quarter 2026 results that included adjusted EBITDA up 58% year over year and quarterly earnings per share of $0.30 versus a Zacks Consensus Estimate of $0.27. Management credited efficiencies from artificial intelligence, a larger recurring revenue base and lower litigation expense for the improved profitability and gave near-term expectations for continued strength.

How big was the move

The stock closed at $10.14 after opening 9.2% above the previous close and traded at 21.9 times its 20-day average in volume. The move was 5.2 times a typical daily move for this stock and was 35.2 percentage points better than the Technology sector median, while the S&P 500 rose 0.6% on the day. Over the last five sessions the stock rose 23.8% as the S&P 500 rose 0.1% over the same span and the Technology sector median rose 1.5%.

The technical picture

The stock traded well above its short- and long-term averages, 38.7% above its 20-day moving average, 38.8% above its 50-day moving average and 43.4% above its 200-day moving average. The 50-day average is above the 200-day average, a sign of an established uptrend, and the stock spent 6 consecutive trading days above the 200-day average. The Relative Strength Index (14 days) was 72, above 70, a level often called overbought. Price remained 38.1% below the 52-week high despite recent gains; the stock rose 49.3% over one month and 77.3% over three months, though it fell 28.1% over one year and sat 41.8 percentage points behind the S&P 500 over that span. Volatility was 112% annualized over 60 days, higher than 98% of its own readings over five years.

Fundamentals and valuation

For the four quarters through September 30, 2026, AudioEye reported revenue of $42.7 million, which grew 8.1% from a year earlier and followed growth of 9.8% one quarter earlier. Gross margin was 79.8% versus 78.6% a year earlier, while operating margin was 4.8% compared with 5.9% a year earlier. Diluted earnings per share over the period was $-0.24 and free-cash-flow margin was 14.3%. The company reported return on invested capital of 17.9% and a balance sheet showing net cash of $8.2 million; share count over one year increased by 4.5%. Market value was $101.6 million.

Valuation metrics showed price to forward earnings at 10.3 times expected earnings and a free-cash-flow yield of 6.0%. PromtFinance scores ranked AudioEye 52 for Value (Neutral), 55 for Growth (Neutral), 66 for Quality (Positive), 42 for Momentum (Weak), 75 for Revisions (Positive) and 21 for Stability (Very weak). Those scores show the stock pairing solid quality and favorable analyst revisions with weak stability and momentum measures.

Earnings and analyst expectations

AudioEye reported on October 26, 2026, with quarterly earnings per share of $0.30 against $0.27 expected, 11.1% above estimates, marking its second consecutive quarter beating estimates. Management said adjusted EBITDA was up 58% year over year and expects fourth-quarter adjusted EBITDA to be up about 56% year over year with sequential annualized fourth-quarter revenue growth of approximately 20%. The next report was scheduled for November 3, 2026. Average surprise over the last four reports was 4.7% above estimates, though the typical two-day reaction after recent reports was a fall of 1.6%.

Seven analysts covered the stock, with a consensus price target of $21.00, 107.1% above the closing price. Eighty-six percent of analyst ratings were Buy or Strong Buy and the consensus rating was Buy. That gap between the consensus target and the market price helps explain why momentum metrics are mixed: analysts are more optimistic than recent price action suggested through much of the past year.

What to watch

• November 3, 2026: next scheduled report date.
• Management expectation for fourth-quarter adjusted EBITDA up about 56% year over year.
• Management expectation for sequential annualized fourth-quarter revenue growth of approximately 20%.
• Share count increased by 4.5% over one year; net cash of $8.2 million on the balance sheet.
• Analyst consensus price target of $21.00, 107.1% above the closing price.