Talking about Avid, I have some comments on Discreet Logic...
Discreet Logic just reported another super earning quarter on Jan. 29 Their EPS is $0.22/share, which exceed analysts' consensus of $0.20, and their gross margin rose to a record 64% (from 55.0% to 63.6%) Both Piper and Volpe Brown reiterated their STRONG BUY rating on 1/30 with target price of upper $30s to $40, and raised their
estimates on Discreet's earning. Robertson Stephen also raised their earning estimates and reiterated Long-term attractive rating. Several reasons that make Discreet attractive:
1) STRONG CUSTOMER BASE: Industrial Light and Magic, Digital Domain, Sony Pictures Imageworks...etc
2) Blockbuster Films using Discreet's products: including the 7 nominee award TITANIC, MIB, The Lost World, ID 4, Speed, English Patient...etc.
3) Huge Market Potential: the market for creative tools fro the
production/post-production industry currently exceeds $3.5 Billion, with high end accounting for about half of the total (which Discreet's products address) The market is undergoing a one-time shift from analog to digital. The emergence of the HDTV market is expected to trigger a new wave of buying digital-video equipment.
Discreet is well-positioned for the emergence of the HDTV market, and will capture a large portion of the $3.5 billion market. Currently trading at approx. 18 times FY 99 earning , it is a bargain and steal compared to AVID, PIXAR, and PINNACLE. I think Discreet will take off any time! Any Comments or thoughts! |
