Business Growth For The Quarter Ended 2020-12-31
Avid Technology Inc does not report a large amount of sales growth, which is not valuable. With that, money managers will appreciate AVID’s gross profit ratio of 63%. Last year, the company showed sales of $360. 466 million.
AVID does not report substantial EBITDA growth. Nevertheless the company’s EBITDA ratio is positive and equal to 12%. The numbers seem positive. I also appreciate that net income grew a 45%. In my opinion, net income grows since interest expenses declined a -24%.
Balance Sheet As Of 2020-12-31
AVID shows $79 million in cash and cash equivalents. In my view, the company has a good amount of cash to conduct additional R&D and increase its marketing efforts. The balance sheet shows deferred revenue of $87 million, which I appreciate. Deferred revenue represents a prepayment by AVID’s clients that have yet to be delivered. To sum up, Avid Technology Inc receives cash in advance of it being earned. In addition, Avid Technology Inc has positive working capital, which traders will like. It means that AVID can cover its short-term liabilities when they come due.
AVID’s short term debt is less significant than the company’s cash and cash equivalents. I think that Avid Technology Inc may not have to worry about any liquidity risk. AVID’s debt to equity ratio is below 2x. Therefore, the debt level appears to be under control. Note that Avid Technology Inc reports cash and cash equivalents of $79 million, and net debt of $127 million.
Quarterly Results For The Quarter Ended 2020-12-31
In Q4 AVID reported quarterly sales of $104 million, and gross profit of $65 million. The gross profit ratio was equal to 62%. Moreover, AVID’s R&D expenses were equal to $14. 902 million, with selling and marketing expenses of $1. 2908 million. Moreover, AVID is profitable, which is positive. Avid Technology Inc released positive quarterly EBITDA of $17. 068 million. I feel that when more investors get to know the financial statistics of AVID, the stock demand will increase. AVID also showed positive net income of $7. 087 million. With this in mind, either you buy shares or not, AVID is a company to be followed carefully.
Valuation and Risks
I assume sales of $360 million. So, AVID trades at 2. 42x forward sales. In my view, it can be justified due to the fact that Avid Technology Inc has decent margins. Institutional shareholders Cruiser Capital Advisors, LLC, MORGAN STANLEY, and Parian Global Management LP are Avid Technology Inc investors.
The following AVID’s insiders acquired or sold equity recently.AVID’s traders will most likely study this information:
+In 2021-03-26, director, officer: CEO & President Rosica Jeff sold equity of AVID.
+In 2021-03-17, officer: Chief Product Officer & SVP Ruzicka Dana sold stock of AVID.
+In 2021-03-17, officer: Chief Financial Officer & EVP Gayron Kenneth L sold equity of AVID.
Avid Technology, Inc. develops, markets, sells, and supports software and integrated solutions for video and audio content creation, management, and distribution worldwide.
If you see an error, please contact the editor. We don’t own AVID’s shares, and this is our opinion. We do not offer a recommendation to buy or sell any stock.