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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Avid Technology, Inc. (XNAS:AVID) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AVID
Name:
AVID TECHNOLOGY, INC. (XNAS:AVID)
Sector:
4.67M
Industry:
Electronic Gaming & Multimedia
CEO:
Mr. Jeff Rosica
Total Employees:
1,405
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 631.50% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AVID TECHNOLOGY, INC.(AVID) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ELECTRONIC GAMING & MULTIMEDIA INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
26.39
One Month Price Target:
$26.57
Six Month Price Target :
$27.46
Likely Price in One Year's Time:
Ticker:
$28.53
Likely Trading Range Today Under (Normal Volatility)
$26.27
Price Upper limit ($) :
$26.64
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$24.21
This week:
$21.52
This month :
$16.65
Other Primary facts
Market Cap:
1.18B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
44.64M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
27.08%
-23.76%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$36.48
$31.74
$16.30
$21.04
Medium risk (<10%) entry points
Buy Call
Sell Call
$30.20
Buy Put:
Sell Put:
$29.18
$22.57
$23.60
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AVID
Sharpe Ratio:
6.00%
Comparison:
AVID, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 139.15% higher than the industry
& ratio is 163.09% higher than the market/S&P 500 average
Average Returns/Yield of
AVID
Daily returns:
0.26%
Weekly returns:
1.29%
Monthly returns:
5.15%
Yearly returns:
21.16%
Comparison of returns:
Average annual returns/yield (last 3 years) is 191.94% above industry average
Classification:
AVID, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.12
Statistical test of Returns:
AVID has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.14%
Weekly Volatility:
9.27%
Monthly Volatility:
18.53%
Yearly Volatility:
64.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
6.71%
Volatility in last five trading days has been 61.94% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.25%
Weekly VaR:
-18.45%
Monthly VaR:
-36.91%
How Much Can the price of
AVID
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-30%
Worst case (decline):
>85%
This translates to price declining to:
$18.56
This translates to price declining to:
$3.96
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AVID is a 160.49% riskier investment compared to the market/S&P 500 & is 123.16% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 46.13% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AVID
Beta in relation to market/S&P 500--1.21
Expected beta in 1 year's time:
0.758
Expected beta in 3 year's time:
1.072
Unlevered (debt free) Beta:
-3.728
Beta in relation to Nasdaq (XNAS):
1.095
Beta in relation to all global stocks::
0.813
Beta Comparison & Analysis
Beta of competitors/peers::
24.015
Beta is -94.97% lower than peers
Average Industry Beta:
0.604
Beta is 100.15% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.503
Alpha is 262.91% above industry average alpha yield
Alpha is 3204% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AVID
Equity cost of capital:
0.114
Equity cost of capital is 56.85% above industry mean WACC
Unlevered (without debt) cost of capital:
-35.25%
Before-tax cost of debt:
1.63%
After-tax cost of debt:
1.29%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.29%
WACC is -39.21% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.32
Revenue growth rate per share of (3Y):
-9.06
Annual revenue growth rate is -110.85% below industry average
EPS:
$1.03
Expected Annual growth rate of EPS (3Y):
70.36%
Expected future EPS growth rate is 212.34% higher than the Electronic Gaming & Multimedia industry
Free cash flow (FCF) per share:
$1.09
-
-
Debt per share
$4.12
EBITDA per share
$1.39
Valuation Analysis Today of
AVID
P/E Ratio:
25.22
P/E Ratio of Competitors/Peers:
75.75
P/E ratio is -66.71% lower than main peers & is -24.10% lower than the industry
Stock price/value with industry average P/E ratio: $34.22
AVID is -22.88% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.83
Price to sales ratio is -28.82% below the industry mean
P/B (Price to book value ratio):
-9.06
Price to free cash flow: 24.14
Price to free cash flow ratio is -4.70% lower than the industry
Net income growth rate (3Y):
-468.63%
Net income growth rate is 1050.28% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-141.35%
Net debt to equity ratio:
-116.33%
Debt to assets ratio:
74.98%
Net debt to assets ratio:
61.71%
Debt-to-asset ratio is 78.78% above industry average
Ability to repay debt:
Interest coverage ratio:
19.67
Interest coverage ratio is -82.05% less than industry average
Looking forward:
Debt growth rate:
-9.47%
Annual debt growth is -219% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.03%
Analysis of Key Statistics
Correlation of price movement with the market:
0.474
Statistical significance of correlation:
AVID has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.384
Stock price is 23.55% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.384
Correlation of price movement with Nasdaq (^IXIC):
0.007
Covariance of price movement with the market:
0.016
Kurtosis
7.068
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.471
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
AVID
Gross Profit Margin Ratio:
260%
Operating Profit Margin Ratio:
11.77%
Operating profit margin is -259.38% lower than the industry
Net Profit Margin Ratio:
260%
Effective Tax Rate:
6.32%
Effective tax rate is -51.68% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-36.60%
Return on equity (ROE) is -16217.62% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
19.41%
Return on assets (ROA) is -498.86% lower than the industry
Financial Leverage:
4.0x
Current Ratio:
0.88
Current ratio is -79.06% below industry average
Cash Conversion Cycle (days):
13
Cash conversion cycle is -82.77% below industry average
The remaining useful life of property plant & equipment is: 3.2 years
Stock based compensation to net income ratio:
7.19%
In-depth Efficiency Analysis
Revenue generated per employee:
296.2K
Each employee generates -56% less revenue than industry average revenue per employee
EBITDA generated per employee:
44.0K
Each employee generates -66% less EBITDA than industry average revenue per employee
Profit generated per employee:
33.9K
Each employee generates -48% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.3K
Each employee generates -54% less free cash flow than industry average revenue per employee
Assets/Capital per employee
65.5K
Each employee generates -54% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 14.98%
Growth rate in R&D investment/expenditure is 243.20% higher than the industry
Competitors/Peer firms of
AVID
Shenandoah Telecommunications Company (XNAS:SHEN)
THRYV HOLDINGS, INC. (XNAS:THRY)
RADIUS GLOBAL INFRASTRUCTURE, INC. (XNAS:RADI)
LIBERTY MEDIA CORPORATION (XNAS:BATRA)
SCHOLASTIC CORPORATION (XNAS:SCHL)
PARTNER COMMUNICATIONS COMPANY LTD. (XNAS:PTNR)
GOGO INC. (XNAS:GOGO)
TREMOR INTERNATIONAL LTD (XNAS:TRMR)
TABOOLA.COM LTD (XNAS:TBLA)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
416.23M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
145.08M
271.15M
66.88M
58.55M
155.23M
96.68M
115.00K
222.22M
6.00K
3.15M
7.94M
61.88M
48.99M
47.58M
50.79M
3.21M
47.58M
Statement of Cash Flow
Date:
Period:
1.80M
Differed Income Tax :
1.06M
Stock Based Compensation :
3.42M
Change in Working Capital :
- 9376.00K
Accounts Receivables:
19.77M
Other Working Capital:
- 12995.00K
Other Non-Cash Items:
426.00K
Net Cash Provided by Operating Activities:
7.92M
Investments in PP&E:
- 3244.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
41.25M
-
41.25M
82.95M
17.82M
11.05M
153.06M
40.98M
32.64M
-
-
4.16M
14.27M
92.05M
-
245.11M
21.38M
8.71M
145.00K
80.74M
63.42M
174.26M
183.79M
5.51M
200.87M
-
375.13M
459.00K
- 1116373.00K
- 4314.0K
-
March 31, 2022 at 6:00:00 AM
367.30M
- 130019.00K
245.11M
-
192.50M
151.3M
-
-
- 3244.00K
- 53.00K
-
- 19498.00K
-
- 440.00K
- 19991.00K
- 254.00K
- 15573.00K
44.98M
60.56M
7.92M
- 3244.00K
4.67M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
AVID
2023
2024
2025
2026
2027
$28.67
$67.17
$72.63
$78.52
$84.90