Stock markets rallied for the last few days. Investors are hopeful that the general bullish market sentiment beginning since the end of March may continue further. Analysts advise staying selective. There are lots of compelling investing opportunities out there. You just need to look carefully.
Some experts advise buying Avid Technology due to its strong potential. This stock belongs to the technology sector. It’s a Massachusetts-based multimedia tech company that specializes in digital non-linear editing systems for video and audio.
Consumers held Avid’s audio and video editing software in high regard, as well as its music notation products. However, Media Composer, which got its start in the Apple Mac segment, is the company’s flagship product. Since then, Avid has expanded significantly. It announced a five-year working agreement with Microsoft Azure in May.
Furthermore, Avid met the Covid-19 economic crisis head-on. It had a $40 million cost-savings plan to help mitigate the pandemic’s effects. In the first quarter, a surge in subscription revenues helped the company. They grew by 50% year-over-year, pushing recurring revenues to double-digit growth.
Avid still had some drawbacks during the last months
The firm saw a significant quarterly loss due to the recessionary pressures of economic measures put in place against coronavirus. As a result, it reported an EPS of minus 12 cents per share.
Despite that, Northland’s analyst Nehal Chokshi thinks that this stock is a top pick. According to him, Avid has two layers of loyalty from their largest customers: the professional video & audio editors, as well as the IT staff that ensure the technology is available. That has led to a dominant share in high-end post-production content creation technology enablement.
In addition, the dominant share at the high end leads to influencing creators to adopt the company’s software, driving market share gains in the Avid’s high-growth high-margin subscription business.
Chokshi rated Avid shares as a Buy and set his price target at $14, which implies a robust 103% upside potential.
- Trading Instrument