Head-To-Head Review: Avid Technology (AVID) versus TransAct Technologies (TACT)

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

Institutional and Insider Ownership

71.8% of Avid Technology shares are held by institutional investors. Comparatively, 38.3% of TransAct Technologies shares are held by institutional investors. 7.5% of Avid Technology shares are held by company insiders. Comparatively, 13.2% of TransAct Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Avid Technology has a beta of 1.78, suggesting that its stock price is 78% more volatile than the S&P 500. Comparatively, TransAct Technologies has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares Avid Technology and TransAct Technologies’ 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%
TransAct Technologies 8.78% 19.99% 15.67%

Dividends

TransAct Technologies pays an annual dividend of $0.36 per share and has a dividend yield of 2.7%. Avid Technology does not pay a dividend. TransAct Technologies pays out 53.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Avid Technology and TransAct Technologies’ top-line 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 0.48 $48.21 million ($0.18) -33.00
TransAct Technologies $57.24 million 1.69 $3.61 million $0.67 19.63

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

Analyst Recommendations

This is a summary of current recommendations for Avid Technology and TransAct Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avid Technology 1 1 0 0 1.50
TransAct Technologies 0 0 1 0 3.00

Avid Technology currently has a consensus price target of $4.50, indicating a potential downside of 24.24%. TransAct Technologies has a consensus price target of $11.00, indicating a potential downside of 16.35%. Given TransAct Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe TransAct Technologies is more favorable than Avid Technology.

Summary

TransAct Technologies beats Avid Technology on 11 of the 16 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.

TransAct Technologies Company Profile

TransAct Technologies Incorporated (TransAct) designs, develops and sells market-specific solutions, including printers, terminals, software and other products for transaction-based and other industries. The Company operates through the segment, which includes design, development, assembly and marketing of transaction printers and terminals, and providing printer and terminal related software, services, supplies and spare parts. Its thermal, inkjet and impact printers and terminals generate labels and transaction records, such as receipts, tickets, coupons, register journals and other documents, as well as printed logging, and plotting of oil field and well drilling data. Its products are sold under the AccuDate, Ithaca, RESPONDER, Epic, EPICENTRAL and Printrex brand names. It focuses on various markets, such as food safety, banking and point-of-sale (POS), casino and gaming, lottery and Printrex, Inc. (Printrex), which serves the oil and gas, medical and mobile printing markets.

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