Why Avid Technology Is Poised to Keep Plunging

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, audio- and video-editing technologist Avid Technology (NASDAQOTH: AVID  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Avid and see what CAPS investors are saying about the stock right now.

Avid facts

Headquarters (founded)

Burlington, Mass. (1987)

Market Cap

$270.9 million

Industry

Computer hardware

Trailing-12-Month Revenue

$622.5 million

Management

CEO Louis Hernandez, Jr. (since February 2013)

CFO Kenneth Sexton (since July 2008)

Return on Equity (average, past 3 years)

(12.2%)

Cash/Debt

$71.4 million / $0

Competitors

Adobe Systems

Apple

Sony

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 32% of the 129 members who have rated Avid believe the stock will underperform the S&P 500 going forward.

Earlier today, one of those Fools, johnbmurdoch, succinctly summed up the Avid bear case for our community:

Avid had serious cash-flow issues late in 2Q 2012, leading to selling off several key brands at fire-sale prices to raise cash. ... Avid sacked CEO Gary Greenfield in early February -- and announced in late February (the day before the scheduled release of FY 2012 results) that Avid was going to miss reporting, and would take an unspecified amount of time to "evaluate" how they had accounted for things like software defects and product liability. The company has been characterized by repeated reorganization plans, and repeated layoffs of high-dollar tech employees--but is in a high-tech business. Too many MBAs, not enough engineers or musicians -- they're not a good investment.

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