NYSE:AVYA

Stock Analysis Report

Executive Summary

Avaya Holdings Corp., through its subsidiaries, provides digital communications products, solutions, and services for businesses worldwide.

Rewards

Trading at 32.4% below its fair value

Earnings are forecast to grow 106.36% per year

Risk Analysis

Interest payments are not well covered by earnings



Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has Avaya Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVYA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.2%

AVYA

1.7%

US Software

1.5%

US Market


1 Year Return

-15.8%

AVYA

42.3%

US Software

20.1%

US Market

Return vs Industry: AVYA underperformed the US Software industry which returned 42.2% over the past year.

Return vs Market: AVYA underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

AVYAIndustryMarket
7 Day4.2%1.7%1.5%
30 Day3.3%7.7%1.4%
90 Day10.7%18.4%8.7%
1 Year-15.8%-15.8%43.9%42.3%22.7%20.1%
3 Yearn/a152.8%142.4%50.1%40.5%
5 Yearn/a224.7%201.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is Avaya Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Avaya Holdings undervalued compared to its fair value and its price relative to the market?

32.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AVYA ($13.4) is trading below our estimate of fair value ($19.83)

Significantly Below Fair Value: AVYA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AVYA is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: AVYA is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate AVYA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: AVYA is good value based on its PB Ratio (1.2x) compared to the US Software industry average (6x).


Next Steps

Future Growth

How is Avaya Holdings forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

106.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVYA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: AVYA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: AVYA's is expected to become profitable in the next 3 years.

Revenue vs Market: AVYA's revenue (1.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: AVYA's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVYA's Return on Equity is forecast to be very high in 3 years time (41.3%).


Next Steps

Past Performance

How has Avaya Holdings performed over the past 5 years?

1.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVYA is currently unprofitable.

Growing Profit Margin: AVYA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: AVYA is unprofitable, but has reduced losses over the past 5 years at a rate of 1.8% per year.

Accelerating Growth: Unable to compare AVYA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: AVYA is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (17.1%).


Return on Equity

High ROE: AVYA has a negative Return on Equity (-59.24%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Avaya Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: AVYA's short term assets ($1.6B) exceed its short term liabilities ($1.2B).

Long Term Liabilities: AVYA's short term assets ($1.6B) do not cover its long term liabilities ($4.8B).


Debt to Equity History and Analysis

Debt Level: AVYA's debt to equity ratio (238%) is considered high.

Reducing Debt: AVYA had negative shareholder equity 5 years ago, but is now positive and has therefore improved.


Balance Sheet

Inventory Level: AVYA has a low level of unsold assets or inventory.

Debt Coverage by Assets: AVYA's debt is not covered by short term assets (assets are 0.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: AVYA has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: AVYA has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Avaya Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate AVYA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate AVYA's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if AVYA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if AVYA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AVYA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

Jim Chirico (61yo)

2.3yrs

Tenure

US$4,362,053

Compensation

Mr. James M. Chirico, Jr., also known as Jim, has been Chief Executive Officer of Avaya Inc. since October 1, 2017 and serves as its President. Mr. Chirico serves as Chief Executive Officer at Avaya India  ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD4.36M) is about average for companies of similar size in the US market ($USD3.76M).

Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
James Chirico
President2.3yrsUS$4.36m0.56% $7.2m
Kieran McGrath
Executive VP & CFO1yrsUS$5.13mno data
Shefali Shah
Executive VP2.2yrsUS$1.82m0.052% $659.5k
Fred Hayes
Senior Vice President of Global Business Operations2.1yrsno datano data
Kevin Speed
VP, Controller & Chief Accounting Officer0.7yrsno datano data
Michael McCarthy
Vice President of Investor Relations1.2yrsno datano data
Simon Harrison
Senior VP & Chief Marketing Officer0.08yrsno datano data
Faye Tylee
Global Head of Human Resources2.1yrsno datano data
Tara Dunning
Chief Revenue Officer1.9yrsno datano data
Vishal Agrawal
Managing Director of India & SAARC0yrsno datano data

1.9yrs

Average Tenure

53.5yo

Average Age

Experienced Management: AVYA's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
James Chirico
President2.3yrsUS$4.36m0.56% $7.2m
William Watkins
Chairman & Lead Independent Director2.3yrsUS$490.00kno data
Susan Spradley
Independent Director2.3yrsUS$463.25kno data
Jacqueline Yeaney
Independent Director0.9yrsUS$352.00kno data
Stephan Scholl
Independent Director2.3yrsUS$433.75kno data
Stanley Sutula
Independent Director2.3yrsUS$476.50kno data
Scott Vogel
Independent Director2.3yrsUS$487.00kno data

2.3yrs

Average Tenure

53yo

Average Age

Experienced Board: AVYA's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Avaya Holdings Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Avaya Holdings Corp.
  • Ticker: AVYA
  • Exchange: NYSE
  • Founded:
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$1.277b
  • Shares outstanding: 95.29m
  • Website: https://www.avaya.com

Number of Employees


Location

  • Avaya Holdings Corp.
  • 4655 Great America Parkway
  • Santa Clara
  • California
  • 95054
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AVYANYSE (New York Stock Exchange)YesNew Common StockUSUSDDec 2017
1KUDB (Deutsche Boerse AG)YesNew Common StockDEEURDec 2017

Biography

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 has a strategic collaboration with RingCentral, Inc. to accelerate the company's transition to the cloud. The company is based in Santa Clara, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 01:41
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.