From Standard & Poor's Equity Research
Roth Capital downgraded Avid Technology (AVID) to hold from buy, noting the company's quarterly results.
Avid Technology recently posted 6 cents vs. 37 cents second quarter earnings per share (EPS.)
Analyst Richard Ingrassia says 34 cents pro forma EPS is a penny ahead of the consensus and guidance. He says this ends a string of three consecutive misses, thanks to a flurry of new products and an unexpected tax credit. However, fiscal year 2006 revenue guided to the low end of the $940 million to $970 million range; pro forma EPS guidance fell to $1.97 from $2.28. He also says Pinnacle consumer sales remain a drag on revenue growth and EPS. He feels the sudden inflection is unlikely: Avid continues to battle downmarket pricing trends with more frequent upgrades and higher-volume software products. He cut his $50 stock price target to $41.