Avaya Holdings Corp (AVYA:NYE) Analysts rate as Underperform, Fundamental Analysis is Bearish

STA Research
by: STA Research
Avaya Holdings Corp

Analysts rate AVYA’s stock  with a consensus Underperform rating with an average 12-months Avaya stock price target of $5.45 per share.

Barclays Capital recently maintained the Underperform rating for AVYA stock at a target price of $0.5.

Based on the AVYA stock forecast from 7 analysts, the average analyst AVYA stock price target is USD 5.45 over the next 12 months. Avaya Holdings Corp’s average analyst rating is Underperform. Stock Target Advisor’s own stock analysis of AVYA stock forecast is Bearish, which is based on 3 positive signals and 8 negative signals. At the last closing, Avaya stock price was USD 0.73Avaya stock price has changed by +0.07% over the past week, -1.78% over the past month and -96.39% over the last year.

Avaya Holdings Corp., through its subsidiaries, provides digital communications products, solutions, and services for businesses worldwide. The company operates in two segments, Products & Solutions and Services. The company has a strategic collaboration with RingCentral, Inc. to accelerate the company’s transition to the cloud. Avaya Holdings Corp. is headquartered in Durham, North Carolina.

 

Most Recent Analyst Ratings for Avaya:

What we like:

Underpriced compared to book value:

AVYA stock is trading low compared to its peers on a price-to-book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior capital utilization:

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow:

The company had positive total cash flow in the most recent four quarters.

 

What we don’t like:

Low market capitalization:

Avaya stock is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk adjusted returns:

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

High volatility:

AVYA stock forecast shows that the total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median dividend returns

The average income yield of Avaya stock over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

Avaya stock price is trading high compared to its peers on a price to earning basis and is above the sector median.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the Avaya stock news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Negative free cash flow

The company had negative total free cash flow in the most recent four quarters.

Low Revenue Growth

AVYA stock has shown below median revenue growth in the previous 5 years compared to its sector

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