Stock markets soared during the last week. Some analysts think that the rally will continue despite surging coronavirus cases. However, they advise choosing the stock carefully before buying. There are so many opportunities, but not all of the futures are profiting investments. However, analysts recommend buying Avid Technology.
This company met the coronavirus crisis head-on. A surge in subscription revenues helped the company in the first quarter. They increased by 50% year-over-year, pushing recurring revenues to double-digit growth. Most importantly, the stock had a $40 million cost-savings plan to help mitigate the pandemic’s effects.
The firm still experienced some hardships. It saw a significant quarterly loss due to the recessionary pressures of economic measures put place against the Covid-19. Overall, Avid reported EPS of minus 12 cents per share.
Nonetheless, Avid has strong roots and a successful production scheme. This Massachusetts-based multimedia tech company specializes in digital non-linear editing systems for video and audio. Consumers held its audio and video editing software in high regard, as well as its music notation products.
Why is Avid a good choice?
The company’s flagship product is Media Composer, which got its start in the Apple Mac segment. Since then, Avid has expanded quickly. In May, the company announced a five-year working agreement with Microsoft Azure.
Avid also has loyalty from their largest customers, from two spheres: the professional video & audio editors, as well as IT staff that ensure the technology is available. Additionally, the dominant share at the high end influences creators to adopt the company’s software, thus driving market share gains in Avid’s high-growth high-margin subscription business.
Considering all this, Northland’s analyst Nehal Chokshi stated that this stock is a top pick. He rated Avid shares as a Strong Buy. Chokshi’s price target is $14, which implies a robust 103% upside potential.
