Critical Survey: Avid Technology (NASDAQ:AVID) and Aware (NASDAQ:AWRE)

Avid Technology (NASDAQ:AVIDGet Rating) and Aware (NASDAQ:AWREGet Rating) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Avid Technology 10.75% -37.85% 20.06%
Aware -7.67% -16.75% -14.39%

Risk & Volatility

Avid Technology has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, Aware has a beta of 0.31, indicating that its stock price is 69% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Avid Technology and Aware, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avid Technology 0 1 3 0 2.75
Aware 0 0 0 0 N/A

Avid Technology presently has a consensus target price of $37.20, suggesting a potential upside of 24.83%. Aware has a consensus target price of $2.50, suggesting a potential upside of 45.35%. Given Aware’s higher probable upside, analysts clearly believe Aware is more favorable than Avid Technology.

Institutional and Insider Ownership

90.3% of Avid Technology shares are owned by institutional investors. Comparatively, 29.7% of Aware shares are owned by institutional investors. 6.7% of Avid Technology shares are owned by company insiders. Comparatively, 25.4% of Aware shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Avid Technology and Aware’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avid Technology $409.94 million 3.18 $41.39 million $0.99 30.10
Aware $16.85 million 2.21 -$5.82 million ($0.06) -28.67

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

Summary

Avid Technology beats Aware on 10 of the 13 factors compared between the two stocks.

About Avid Technology

(Get Rating)

Avid Technology, Inc., together with its subsidiaries, develops, markets, sells, and supports software and integrated solutions for video and audio content creation, management, and distribution worldwide. The company's video products and solutions include the Media Composer, a cloud-enabled solution used to edit video content; Avid NEXIS shared storage systems; Maestro solutions for the integration of virtual sets, augmented reality, and video wall control into existing workflows; AirSpeed 5000 and AirSpeed 5500 on-air server solutions; and MediaCentral, a media production suite. Its audio products and solutions comprise Pro Tools digital audio software solutions to facilitate the audio production process; Sibelius solution to create, edit, and publish musical scores; S6 line of complementary control surfaces and consoles; S1 and S4 audio control surfaces; and VENUE | S6L live sound system for mixing audio for live sound reinforcement. The company also provides Avid Link, a mobile application to connect with other artists, producers, mixers, composers, editors, videographers, movie makers, and graphic designers; FastServe video server that assists broadcasters in making the move to UHD and IP based workflows with a new and modular architecture; and hardware products, such as I/O devices, interfaces, and audio and video processing equipment. In addition, it offers various maintenance contracts and support services; professional services, such as workflow design and consulting, program and project management, system installation and commissioning, and custom development and role-based product level training; and public and private training to customers and alliance partners, as well as develops and licenses curriculum content for use by third party Avid Learning partners to deliver training to customers, users, and alliance partners. The company was incorporated in 1987 and is headquartered in Burlington, Massachusetts.

About Aware

(Get Rating)

Aware, Inc. is a biometrics software and services company. The firm’s products are used in government and commercial biometrics systems, which are capable of determining or verifying an individual’s identity. It also provides interoperable, standards-compliant, field-proven biometric functionality, used to capture, verify, format, compress and decompress biometric images, as well as aggregate, analyze, process, and transport those images within biometric systems. The company was founded in 1986 and is headquartered in Burlington, MA.

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