magicJack VocalTec Ltd (NASDAQ:CALL) shares rose more than 9% today after the company posted solid fourth quarter results and issued strong guidance for the current fiscal year. In fact, magicJack’s guidance was surprisingly detailed and also quite a bit better than Wall Street was expecting.

magicJack

magicJack reports solid activations

Recently magicJack VocalTec Ltd (NASDAQ:CALL) began a renewed advertising campaign. Although it is still pretty early in that campaign, analysts Greg Miller and Eric Chu believe the company will continue scaling. They note that the company is already seeing results from that ad campaign, so that strength in subscriber growth will likely continue and could end up offering even more upside to the more optimistic estimates which analysts have issued since the quarterly report.

magicJack VocalTec Ltd (NASDAQ:CALL) reported 246 activations during the quarter, compared to Canaccord Genuity’s expectations of 216. The company’s monthly churn rate was 3.2%, which was in line with estimates. Adjusted EBITDA was $14 a share, compared to estimates of $10.60 a share. GAAP earnings per share were $2.50, compared to expectations of 31 cents per share.

Looking ahead to 2014

Currently magicJack VocalTec Ltd (NASDAQ:CALL) has about 6.9 registered users of its app. Although it hasn’t fully explained how it plans to monetize it, the Canaccord Genuity team still believes that upside from that app continues. As a result, they raised their price target to $24 a share based on their increased estimates for 2014 and 2015, as well as a higher multiple as the company continues its turnaround process.

Along with its quarterly results, magicJack VocalTec Ltd (NASDAQ:CALL) also revealed that it is planning to deploy a redesigned device which will be more tightly integrated with the app. That new device is expected to come out in April, just a year after the launch of the previous device. When combining the new device with the new way magicJack approaches the market, including the rebranding, they think more and more people will sign up, pushing the app user base to a strong growth rate and improving the company’s effective average revenue per user.