Avid (AVID) Soars 27.1%: Is Further Upside Left in the Stock?

·2 min read

Avid Technology (AVID) shares rallied 27.1% in the last trading session to close at $27.59. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.6% gain over the past four weeks.

The upswing in share price came after the company reported better-than-expected first quarter, 2021 results. Avid’s first-quarter revenues rose 9.2% year-over-year to $94.3 million. The gains were fueled by 78.2% year-over-year increase in subscription revenues, to $24.9 million, reflecting continued growth in paid subscriptions and strong enterprise subscription sales in the quarter. Adjusted earnings were 28 cents per share, against adjusted loss of 8 cents in the year-ago quarter.

Price and Consensus

Price Consensus Chart for AVID
Price Consensus Chart for AVID

This audio and video technology company is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of +83.3%. Revenues are expected to be $88 million, up 11% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Avid, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AVID going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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