Critical Comparison: Avaya (AVYA) versus Its Peers

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Avaya (NYSE: AVYA) is one of 26 public companies in the “Telephone & telegraph apparatus” industry, but how does it weigh in compared to its rivals? We will compare Avaya to related companies based on the strength of its risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Insider & Institutional Ownership

43.8% of shares of all “Telephone & telegraph apparatus” companies are held by institutional investors. 0.7% of Avaya shares are held by insiders. Comparatively, 20.9% of shares of all “Telephone & telegraph apparatus” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Avaya has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, Avaya’s rivals have a beta of 4.71, indicating that their average stock price is 371% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Avaya and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avaya 0 3 4 0 2.57
Avaya Competitors 198 621 1051 47 2.49

Avaya currently has a consensus target price of $18.71, indicating a potential upside of 51.53%. As a group, “Telephone & telegraph apparatus” companies have a potential upside of 37.83%. Given Avaya’s stronger consensus rating and higher possible upside, equities analysts clearly believe Avaya is more favorable than its rivals.

Profitability

This table compares Avaya and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avaya -23.24% 13.33% 3.41%
Avaya Competitors -104.74% -6.01% -1.08%

Valuation & Earnings

This table compares Avaya and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Avaya $2.89 billion -$671.00 million 3.16
Avaya Competitors $717.17 million -$49.68 million 10.14

Avaya has higher revenue, but lower earnings than its rivals. Avaya is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Avaya beats its rivals on 7 of the 13 factors compared.

Avaya Company Profile

Avaya Holdings Corp., through its subsidiaries, provides digital communications products, solutions, and services for businesses worldwide. The company operates through two segments, Products & Solutions, and Services. The Products & Solutions segment offers unified communications and contact center platforms, applications, and devices. It also provides an open development platform for customers and third parties to create custom applications and automated workflows for their needs; and contact center solutions that enable customers to build a customized portfolio of applications driving customer engagement and customer value. This segments communications solutions include voice, email, chat, social media, video, and performance management. The Services segment provides global support services, enterprise cloud and managed services, and professional services. The company also delivers cloud business communications services and solutions to connect with customers. Avaya Holdings Corp. sells directly through its sales force, as well as indirectly through its network of channel partners, including distributors, service providers, dealers, value-added resellers, system integrators, and business partners. The company is based in Santa Clara, California.

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