{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "AEYE",
  "name": "AudioEye, Inc.",
  "url": "https://frontierpicks.com/dossiers/AEYE/",
  "json_url": "https://frontierpicks.com/dossiers/AEYE.json",
  "status": "DORMANT",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a7",
    "n": 7
  },
  "current_thesis": "AudioEye's shares are more likely to lag the S&P 500: the company is profitable, but sales grew 7%, the executive chairman kept selling, and the stock is up 137% in three months; the Q4 report decides it.",
  "invalidation_trigger": "A daily close above $16.52, over the $14.68 intraday high of 2026-10-30, which would show the shares leading the S&P 500. A fourth-quarter revenue result above the $11.6 million top of guidance would also show that.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "ai-enterprise-software"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "AUDIOEYE INC - Form 4 - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001362190/000165884326000010/form4-11032026_111154.xml",
      "date": "2026-11-03"
    },
    {
      "title": "AUDIOEYE INC - Form 10-Q - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001362190/000110465926118855/aeye-20260930x10q.htm",
      "date": null
    },
    {
      "title": "Audioeye (NASDAQ:AEYE) Stock: Insider David Moradi Sells 39,312 Shares",
      "url": "https://www.thecerbatgem.com/2026/11/05/audioeye-nasdaqaeye-stock-insider-david-moradi-sells-39312-shares.html",
      "date": "2026-11-05"
    },
    {
      "title": "AudioEye executive chairman Moradi sells $2.4M in shares at $13.33-$14.16",
      "url": "https://www.investing.com/news/insider-trading-news/audioeye-executive-chairman-moradi-sells-24m-in-shares-at-13331416-93CH-4997232",
      "date": null
    },
    {
      "title": "Finviz",
      "url": "https://finviz.com/news/404586/audioeye-announces-15-million-stock-repurchase-program",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "David Moradi reported selling 22,359 shares at an average of $12.72 on 2026-11-04, after 177,641 shares sold from 2026-10-30 to 2026-11-03 at an average of $13.50.",
      "source": "SEC Form 4 filings for AudioEye, filed 2026-11-03 and 2026-11-06",
      "as_of": "2026-11-06"
    },
    {
      "claim": "Q3 2026 revenue was $10.96 million, up 7% year over year from $10.23 million.",
      "source": "AudioEye Q3 2026 earnings release",
      "as_of": "2026-10-26"
    },
    {
      "claim": "Q3 adjusted EBITDA was $3.89 million (35% margin), against $2.45 million (24%) a year earlier; GAAP net income was $0.99 million.",
      "source": "AudioEye Q3 2026 earnings release",
      "as_of": "2026-10-26"
    },
    {
      "claim": "ARR was $43.3 million, up 12% year over year and up from $42.3 million at 2026-06-30.",
      "source": "AudioEye Q3 2026 earnings release",
      "as_of": "2026-09-30"
    },
    {
      "claim": "2026 guidance: adjusted EBITDA of $13.4–13.6 million, adjusted EPS of at least $1.04 and revenue of $43.6–43.8 million; Q4 sales guide $11.4–11.6 million.",
      "source": "AudioEye Q3 2026 earnings release; Benzinga",
      "as_of": "2026-10-26"
    },
    {
      "claim": "Cash was $9.33 million against $16.6 million of term loan principal; nine-month operating cash flow was $4.04 million, up from $2.22 million a year earlier.",
      "source": "AudioEye Q3 2026 Form 10-Q",
      "as_of": "2026-09-30"
    },
    {
      "claim": "No shares had been repurchased under the new $15 million programme through 2026-10-26, and none under the prior programme in the third quarter.",
      "source": "AudioEye Q3 2026 Form 10-Q",
      "as_of": "2026-10-26"
    },
    {
      "claim": "Consensus target is $14.62 from six analysts: four Buy, one Hold, one Sell.",
      "source": "The Cerbat Gem, 2026-11-05",
      "as_of": "2026-11-05"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Technology",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-26",
              "restated": null,
              "value_musd": 11,
              "yoy_pct": 7.2
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-13",
              "restated": null,
              "value_musd": 10.7,
              "yoy_pct": 8.7
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-12",
              "restated": null,
              "value_musd": 10.6,
              "yoy_pct": 8.4
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-12",
              "restated": null,
              "value_musd": 10.5,
              "yoy_pct": 7.9
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-04",
              "restated": null,
              "value_musd": 10.2,
              "yoy_pct": 14.6
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-08",
              "restated": null,
              "value_musd": 9.9,
              "yoy_pct": 16.4
            }
          ]
        },
        "gross_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-26",
              "restated": null,
              "pct": 82.9
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-13",
              "restated": null,
              "pct": 78.8
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-12",
              "restated": null,
              "pct": 78.2
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-12",
              "restated": null,
              "pct": 78.9
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-04",
              "restated": null,
              "pct": 77.4
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-08",
              "restated": null,
              "pct": 77.3
            }
          ]
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-10-26",
              "restated": null,
              "pct": 11.4
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-13",
              "restated": null,
              "pct": -5.6
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-12",
              "restated": null,
              "pct": -17.8
            },
            {
              "end": "2025-12-31",
              "filed": "2026-03-12",
              "restated": null,
              "pct": -7.8
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-04",
              "restated": null,
              "pct": -3.1
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-08",
              "restated": null,
              "pct": 2.5
            }
          ]
        },
        "pretax_income": {
          "status": "not reported"
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "four_quarters_end": "2026-09-30",
          "value_musd": 1,
          "four_quarters_musd": -3
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "first_end": "2025-12-31",
          "value_musd": 6.6
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "first_end": "2025-12-31",
          "value_musd": 0.1
        },
        "free_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "first_end": "2025-12-31",
          "value_musd": 6.5
        },
        "diluted_share_change": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "base_end": "2025-09-30",
          "pct": 4.5
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "value_musd": 9.3
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "value_musd": 16.2,
          "composition": "long-term debt"
        },
        "net_cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "value_musd": -6.9
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "value_musd": 8.4,
          "yoy_pct": 12.9
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "value_musd": 5.8
        },
        "inventory": {
          "status": "not reported"
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-10-26",
          "value_musd": 5.1
        },
        "market_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-26",
          "basis_filed": "2026-10-26",
          "value_musd": 170.9
        },
        "enterprise_value": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-26",
          "basis_filed": "2026-10-26",
          "value_musd": 177.8
        },
        "ev_sales": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-26",
          "basis_filed": "2026-10-26",
          "multiple": 4.2
        },
        "ev_ebit": {
          "status": "not meaningful"
        },
        "pe": {
          "status": "not meaningful"
        },
        "pb": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-26",
          "basis_filed": "2026-10-26",
          "multiple": 33.7
        },
        "fcf_yield": {
          "status": "ok",
          "close_date": "2026-11-13",
          "basis_end": "2026-10-26",
          "basis_filed": "2026-10-26",
          "pct": 3.8
        }
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": 2.09,
      "days_to_cover": 5.3,
      "change_pct": 0.5
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 127910.2,
          "sold_usd": 2682962.84,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 538355.2,
          "sold_usd": 2682962.84,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\nAudioEye's shares are more likely to lag the S&P 500 than lead it over the next three months. The company is now profitable, but revenue grew 7% in the third quarter, its executive chairman kept selling stock after the post-earnings surge, and the shares have already risen 137.0% in three months; the fourth-quarter report, due around March 2027, settles whether earnings keep climbing.\n\nThe shares closed at $13.77 on 2026-11-11, against $5.81 on 2026-08-13. The consensus target of $14.62 from six analysts (four Buy, one Hold, one Sell; The Cerbat Gem, 2026-11-05) sits close to that price. The market has therefore already paid for the margin step-up reported on 2026-10-26.\n\nDavid Moradi, executive chairman, chief product officer, director and 10% owner, reported two sets of open-market sales through Sero Capital LLC. The first was 177,641 shares from 2026-10-30 to 2026-11-03 at an average of $13.50 (Form 4 filed 2026-11-03). The second was 22,359 shares on 2026-11-04 at an average of $12.72 (Form 4 filed 2026-11-06).\n\nThe business case rests on margins. Third-quarter revenue rose 7% to $10.96 million, while adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation, excluding items the company adjusts out) rose to $3.89 million from $2.45 million (company release, 2026-10-26). Management guides 2026 adjusted EBITDA to $13.4–13.6 million.\n\n## Bull Case\n- **GAAP profit arrived in the third quarter.** Net income was $0.99 million, or $0.08 per diluted share, against a $0.55 million loss a year earlier (company release, 2026-10-26). Adjusted gross margin rose to 88% from 83%.\n- **Earnings guidance beat consensus.** The 2026 adjusted earnings-per-share guide of at least $1.04 compares with a $0.98 consensus, and the fourth-quarter guide of $0.32–$0.33 compares with $0.30 (Benzinga, 2026-10-26).\n- **Recurring revenue keeps growing.** Annual recurring revenue (ARR) reached $43.3 million on 2026-09-30, up 12% year over year (company release). The Form 10-Q counts about 130,000 customers on that date, up 6% from about 123,000.\n- **Cash generation improved.** Operating cash flow for the first nine months of 2026 was $4.04 million, against $2.22 million a year earlier (Form 10-Q). Cash rose to $9.33 million on 2026-09-30 from $5.29 million on 2025-12-31.\n- **The lender loosened buyback terms.** A loan modification dated 2026-10-26 removed the dollar cap on repurchases under the term loan (Form 10-Q). The board authorised up to $15 million of repurchases through 2027-10-18, announced on 2026-10-20.\n- **A director keeps buying.** James Hawkins bought 3,000 shares at $12.34 on 2026-10-29, 4,000 at $13.15 on 2026-10-30 and 3,000 at $12.77 on 2026-11-04 (SEC Form 4 filings).\n\n## Bear Case\n- **The executive chairman keeps selling.** Moradi's sales ran from the $13.33–$14.16 range on 2026-10-30 and 2026-11-03 to a $12.72 average on 2026-11-04 (Form 4 filings). The 2026-11-03 form shows 1,771,966 shares held through Sero and 797,595 held directly after those sales, and it does not mark them as made under a Rule 10b5-1 pre-arranged plan.\n- **Sales growth is single-digit.** Third-quarter revenue grew 7%. The 2026 sales guide narrowed to $43.6–$43.8 million from $43.5–$44.0 million, against a $43.619 million consensus, and the fourth-quarter sales guide is $11.4–$11.6 million (Benzinga, 2026-10-26).\n- **The buyback is authorised, not yet used.** The company bought no shares under the new programme through 2026-10-26 and none under the prior one in the third quarter (Form 10-Q). Repurchases require no event of default and at least $5.0 million of liquidity afterward, and the $15 million authorisation exceeds the $9.33 million of cash on 2026-09-30.\n- **Debt exceeds cash.** Term loan principal was $16.6 million on 2026-09-30, and stockholders' equity was $5.08 million. Covenants cap funded debt at 2.50 times adjusted EBITDA through 2027-06-30, then 2.00 times (Form 10-Q).\n- **Revenue is concentrated.** Two customers accounted for 11% and 12% of third-quarter revenue (Form 10-Q).\n- **Litigation costs still weigh on GAAP results.** Litigation expense was $3.40 million for the first nine months of 2026, against $1.94 million a year earlier, and the nine-month GAAP net loss was $1.99 million (company release, 2026-10-26).\n\n## Setup & Price Structure\nThe shares closed at $12.89 on 2026-11-04, $12.06 on 2026-11-05, $12.37 on 2026-11-06, $12.96 on 2026-11-09, $13.67 on 2026-11-10 and $13.77 on 2026-11-11. The 52-week intraday high is $14.68, set on 2026-10-30, and the last close is 6.2% below it. The 52-week closing low is $5.40, on 2026-03-24.\n\nThe 50-day average of adjusted closes is $8.59 and the 200-day average is $7.27, both far under the last close. Benzinga reported the shares up 33.96% to $9.94 in the intraday session on 2026-10-27, the first session after the third-quarter report. The shares have since traded above that level on every close listed above.\n\nThe 52-week intraday high of $14.68 is the nearest level the case turns on. A close beyond it would extend the post-earnings move; a close back toward the 2026-11-05 low of $12.06 would show the buying fading.\n\nWith 12,684,577 shares outstanding on 2026-10-26 (Form 10-Q), modest volume can move the price sharply. The company announced on 2026-11-12 that it will take part in investor conferences in November.\n\n## Catalyst Calendar\n\n- **~2027-03-05 (est.):** Q4 and full-year 2026 report. Tests whether adjusted EBITDA reaches the $13.4–13.6 million guide, Q4 revenue reaches the $11.4–11.6 million guide and ARR growth holds near 12%, and shows whether the company used the $15 million buyback.\n\n## What Would Change Our Mind\n\nA daily close above $16.52, over the $14.68 intraday high of 2026-10-30, which would show the shares leading the S&P 500. A fourth-quarter revenue result above the $11.6 million top of guidance would also show that.\n\n## Correlation Notes\nAudioEye's move came from its own results and its buyback news, so the read depends little on software peers. The 2026-10-27 surge followed the company's own third-quarter report, with no sector news behind it. This view would be wrong if AudioEye's largest daily moves began tracking a software peer group on days with no company news.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-12T17:17:30+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}