Should Value Investors Buy Avid Technology (AVID) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Avid Technology (AVID). AVID is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock is trading with P/E ratio of 10.39 right now. For comparison, its industry sports an average P/E of 26.17. Over the past year, AVID's Forward P/E has been as high as 187.67 and as low as 6.05, with a median of 34.
Investors should also note that AVID holds a PEG ratio of 1.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AVID's industry currently sports an average PEG of 2.11. Over the past 52 weeks, AVID's PEG has been as high as 3.04 and as low as 0.61, with a median of 0.69.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Avid Technology is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AVID feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.