FTSE 100 lists cybersecurity giant Avast (LON: AVST), and its stock saw the flatline despite a seemingly positive set of financial results from its third quarter trading.
At actual rates, adjusted revenues rose 2.6% year-on-year in the third quarter, up from £220 million to £226 million. Meanwhile, on an organic basis excluding acquisitions, disposals and currency changes, revenues for the first quarter increased 8.6% year-on-year, up from £209.9 million to £225.1 million.
Comparisons with one year show roughly the same trend. Adjusted face value revenues rose 1.9% from £647.1 million to £659.1 million, while organic revenues rose 7.3% from £613.9 million to £654.8 million.
Avast said customer trends have normalised as the country emerged from lockdown, with adjusted return growth stopping out the adjusted billing rate growth for the third quarter.
The company added that its consumer desktop business continues to perform in line with pre-pandemic levels. Additionally, the adjusted EBITDA rose 3.3% to $126 million in the third quarter, and the adjusted EBITDA also rose 2.5% the day before, up to $367.3 million.
Avast said strong cash generation allowed it to accelerate deleverage as voluntary repayments in the third quarter to be $100 million in debt. He added that its liquid balance sheet will allow for additional development opportunities.
Speaking about the outcome, Ondrej Vlcek, CEO of the company, said: “Avast is at the forefront of protecting people’s personal information and privacy as cyberattackers have stepped up efforts to leverage digital vulnerabilities throughout the pandemic. The value of Avast services and technology is reflected in the company’s resilient financial performance, continuing to invest in growth and focusing on innovation.”
The company’s outlook for the future is as follows: “As a result of strong demand in the second quarter, revenue growth is expected to continue to outweigh Billing’s growth later this year. The group reaffirms its 2020 outlook that adjusted revenues are at the top of medium single-digit growth and its widely adjusted percentage of EBITDA margins.”
Following the update, Avast stock was soaked in a modest DIP of 0.19% at 512.00p 21/10/20 11:30 before recovering. At this price, the analyst’s target price is currently above 5% of 539.85p, below the six-month peak of 600.00pa share.
Analysts currently have a consensus “buy” attitude towards stocks. The P/E ratio of 20.14 is below the average of 66.38 for computers and high-tech sectors. MarketBeat also has a “outperform” rating of 69.18% on its stock.
