This communications company posted EPS of $0.27 last quarter, handily beating Wall Street’s estimates of $0.13.
BUY: Avid Technology, Inc. (AVID)
From Upside
A sound investment, Avid Technology sells audio and video solutions used by media and entertainment companies to create and distribute content. A large recurring revenue stream (71% of trailing 12-month sales) and gains in cloud-based software subscriptions have boosted profitability and free cash flow. In addition, new products, improved pricing, and enhanced digital marketing contributed to accelerating profit growth.
Powered by strong organic growth, Avid is expected to deliver per-share profit growth of 26% this year and 51% in 2021. Yet shares trade at 12 times projected 2021 profits, below the median of 20 for technology stocks in the S&P 1500 Index. The stock has rallied 38% so far this year, outpacing the 4% return of the S&P 600 Index.
Despite hovering near its all-time high, Avid seems capable of climbing 20% in the year ahead. Avid is rated Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, December 7, 2020