Avid Technology (AVID) & RADCOM (RDCM) Financial Analysis

Avid Technology (NASDAQ: AVID) and RADCOM (NASDAQ:RDCM) are both small-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Avid Technology and RADCOM, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avid Technology 1 1 0 0 1.50
RADCOM 0 0 2 0 3.00

Avid Technology currently has a consensus target price of $4.50, suggesting a potential downside of 17.88%. RADCOM has a consensus target price of $27.00, suggesting a potential upside of 42.48%. Given RADCOM’s stronger consensus rating and higher possible upside, analysts plainly believe RADCOM is more favorable than Avid Technology.

Valuation & Earnings

This table compares Avid Technology and RADCOM’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avid Technology $511.93 million 0.44 $48.21 million ($0.18) -30.44
RADCOM $29.51 million 8.45 $1.91 million ($0.01) -1,893.11

Avid Technology has higher revenue and earnings than RADCOM. RADCOM is trading at a lower price-to-earnings ratio than Avid Technology, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

71.8% of Avid Technology shares are owned by institutional investors. Comparatively, 14.3% of RADCOM shares are owned by institutional investors. 7.5% of Avid Technology shares are owned by company insiders. Comparatively, 69.0% of RADCOM shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Avid Technology and RADCOM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avid Technology -1.75% -5.36% 6.12%
RADCOM -0.27% 0.71% 0.55%

Volatility and Risk

Avid Technology has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500. Comparatively, RADCOM has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Summary

RADCOM beats Avid Technology on 9 of the 14 factors compared between the two stocks.

Avid Technology Company Profile

Avid Technology, Inc. is a provider of an open and integrated technology platform, along with applications and services that enable the creation, distribution and monetization of audio and video content. The Company develops, markets, sells and supports software and hardware for digital media content production, management, secured content storage and distribution. The Company’s products are used in production and post-production facilities; film studios; network, affiliate, independent and cable television stations; recording studios; live-sound performance venues; advertising agencies; government and educational institutions; corporate communication departments, and by independent video and audio creative professionals, as well as aspiring professionals and enthusiasts. Projects produced using its products include feature films, television programs, live events, news broadcasts, commercials, music, video and other digital media content.

RADCOM Company Profile

RADCOM Ltd. (RADCOM) provides service assurance and customer experience management solutions for communication service providers (CSPs). The Company provides solutions for networks, including long-term evolution (LTE), LTE Advanced (LTE-A), voice over LTE (VoLTE), Internet protocol multimedia subsystem (IMS), Voice over Internet protocol (VoIP), universal mobile telecommunications system (UMTS) or global system for mobile communications (GSM) and mobile broadband. Its software-based solutions enable CSPs to manage both existing networks and network functions virtualization (NFV) based architectures. Its products and solutions include The MaveriQ Solution for Service Assurance and customer experience management (CEM). The MaveriQ solution is a probe-based customer and service assurance solution designed to enable CSPs to carry out end-to-end voice and data quality monitoring and to manage their networks and services. The MaveriQ solution offers analysis and troubleshooting tools.

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