Avid Technology, Inc. (NASDAQ: AVID)
Avid Technology, Inc. (AVID), a global software and hardware digital media content production company yesterday reported their third quarter 2016 financial results. Avid Technology reported third quarter revenues of $119 million which fell short of analyst expectations of $138.25 million.
Avid Technology, Inc. CEO’s Comments
“We are pleased that our non-GAAP Operating Expenses, Adjusted EBITDA and Adjusted Free Cash Flow were in-line with guidance and that growth of our cloud-enabled subscribers and enterprise users on the MediaCentral platform continues to be very robust,” said Louis Hernandez, Jr, Chairman, President, and CEO of Avid. “Our Bookings and non-GAAP Revenue fell short of guidance due primarily to the transition of the storage product line, as some existing enterprise clients deferred normal upgrade and renewal decisions and new customers postponed investments until the release of functionality targeted to the enterprise market. We believe the enterprise-class functionality recently rolled out for NEXIS will set the course for improved growth, but not enough to make up the third quarter shortfall. In light of these factors and continued volatility in the enterprise market, we are more heavily risk-adjusting the timing of certain enterprise deals and reducing our financial guidance for full-year 2016.
“Continued momentum of key growth metrics and our improvement in Adjusted Free Cash Flow demonstrate that the transformation is on-track. We have executed $67 million of the $76 million savings we had planned for 2016 and delivered a $28 million sequential improvement in Adjusted Free Cash Flow in the quarter. We will continue to invest in growth areas and are working towards launching full cloud-enabled versions of the MediaCentral platform and the entire Avid Everywhere suite of products. As the platform matures and we position the company for growth, we expect we’ll continue to realize efficiencies, including additional opportunities of more than $30 million in annualized cost savings,” Mr. Hernandez concluded. Globe Newswire
AVID Technical Analysis
AVID opened trading yesterday at $5.92 which was down from the previous day’s trading close of $6.05. AVID closed trading yesterday at $6.32 and crashed down after market to $5.27, equivalent to a 17% decrease from the closing price. Taking a look at the daily chart we can see the last time AVID traded below these levels we have to go back to May 9th when it traded at lows of $5.26. Taking a closer look at the daily chart we can see that before the spike down AVID had already been in an overall downward trend dating back to August 19th when it traded at $9.69. AVID has a float of 31.86 million shares and traded 1.16 times the normal daily trading volume on Wednesday. For trading purposes, I would like to see AVID open trading on Thursday below $5.60 and if it does I would be looking to take a long position at the bell. My stop loss would be $0.20 from my entry position fearing anything more than that and the stock would start to fill in the gap down. My friend Ross over at Warrior Trading is applying his Day Trading Strategies to these types of stocks.
Avid Technology, Inc. develops, markets, sells, and supports software and hardware for digital media content production, management, and distribution worldwide. The company offers professional video creative tools, such as Media Composer product line that is used to edit video content; NewsCutter option and iNews systems for news production; Avid Symphony option, which is used during post-production; Media Composer | Cloud solution that enables broadcast news professionals to acquire, access, edit, and finish stories; and Avid Artist | DNxIO, a hardware interface for video production. It also offers media management solutions comprising Avid MediaCentral | UX Web and mobile-based apps that provide real-time access to media assets for media professional; and Avid Interplay asset management solutions that offer network, storage, and database solutions to enable users to simultaneously share and manage media assets across a project or organization. In addition, the company provides Avid ISIS shared storage systems; AirSpeed 5000 and AirSpeed 5500 on-air server solutions; and Pro Tools digital audio software and workstation solutions that facilitate the audio production process. Further, it offers complementary control surfaces and consoles; VENUE product family that includes console systems for mixing audio for live sound reinforcement; and Sibelius-branded software that allows users to create, edit, and publish musical scores. Additionally, the company provides workflow design and consulting; program and project management; system installation and commissioning; custom development; and role-based product level training services. It offers its products and solutions to customers in broadcast and media, video and audio post, and professional markets through a network of sales representatives, independent distributors, value-added resellers, dealers, retailers, and digital sales channels. The company was founded in 1987 and is headquartered in Burlington, Massachusetts. Yahoo Finance