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Thursday, October 22, 2020

Avaya Holdings Corp. (NYSE:AVYA) Stock is Plummeting, Here is Why

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Avaya Holdings Corp. (AVYA) shares are trading at lower $18.00 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $19.75.

To add more color to this target, the company’s high over the last year is $19.70 and the low is $6.13. Over the last 52 weeks, AVYA is up 43.66% while the S&P 500 is up 16.41%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, AVYA reported a profit of $397.0 million. Avaya Holdings Corp. also saw revenues increase to $721.0 million. In addition, AVYA has free cash flow of $5.0 million as of 06-2020. The company’s EBITDA came in at $165.0 million which compares well with its peers.

AVYA booked profit margins of -26.30%, its Return on Equity (ROE) is -105.70%, and its Return on Assets is -11.20%. All told, it is clear that, AVYA needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. AVYA has a short ratio of 10.71 and outstanding shares of 83.10M.

Company Outlook

AVYA has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.8 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -7.89. Avaya Holdings Corp. AVYA also noted assets of $6.27 billion at the end of the last quarter. Investors should also keep an eye on sector updates as AVYA has historically followed its peers on positive news.

All told, Avaya Holdings Corp. AVYA has strung together solid data and demonstrated underlying fundamentals. At its current valuation, AVYA represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Avaya Holdings Corp. AVYA is now commanding a market cap of 1.53B and a float of 81.22M. AVYA is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of AVYA stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in AVYA, either long or short, and we have not been compensated for this article.

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