Reviewing Avaya (AVYA) & Its Competitors

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

Volatility and 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 peers have a beta of 4.71, indicating that their average stock price is 371% more volatile than the S&P 500.

Profitability

This table compares Avaya and its peers’ 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%

Analyst Ratings

This is a breakdown of current ratings and price targets for Avaya and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avaya 0 3 4 0 2.57
Avaya Competitors 198 620 1050 47 2.49

Avaya presently has a consensus price target of $18.71, indicating a potential upside of 48.41%. As a group, “Telephone & telegraph apparatus” companies have a potential upside of 37.27%. Given Avaya’s stronger consensus rating and higher possible upside, analysts clearly believe Avaya is more favorable than its peers.

Earnings and Valuation

This table compares Avaya and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Avaya $2.89 billion -$671.00 million 3.23
Avaya Competitors $717.17 million -$49.68 million 10.27

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

Insider & Institutional Ownership

43.8% of shares of all “Telephone & telegraph apparatus” companies are owned by institutional investors. 0.7% of Avaya shares are owned by company insiders. Comparatively, 20.9% of shares of all “Telephone & telegraph apparatus” companies are owned by company 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.

Summary

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

About Avaya

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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