KeyBanc Capital Markets slashes price target on Avid Bioservices Inc. [CDMO] – find out why.

Avid Bioservices Inc. [NASDAQ: CDMO] slipped around -1.52 points on Tuesday, while shares priced at $16.01 at the close of the session, down -8.67%. The company report on March 9, 2021 that Avid Bioservices, Inc. Announces Proposed $125 Million Offering of Exchangeable Senior Notes.

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Avid Bioservices, Inc. (NASDAQ:CDMO) (NASDAQ:CDMOP) (the “company”), a dedicated biologics contract development and manufacturing organization (CDMO) working to improve patient lives by providing high quality development and manufacturing services to biotechnology and pharmaceutical companies, announced that its wholly-owned subsidiary, Avid SPV, LLC (the “Issuer”), intends to sell, subject to market and other conditions, $125 million aggregate principal amount of exchangeable senior notes due 2026 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Issuer also intends to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $18.75 million aggregate principal amount of the notes.

The notes will be senior, unsecured obligations of the Issuer, will be fully and unconditionally guaranteed by the company on a senior, unsecured basis, and will accrue interest payable semi-annually in arrears. The notes will mature on March 15, 2026, unless earlier repurchased, redeemed or exchanged. Holders of the notes will have the right to exchange their notes for shares of the company’s common stock in certain circumstances and during specified periods. The notes will be settled in cash, shares of the company’s common stock or a combination of cash and shares of the company’s common stock, at the Issuer’s election.

Avid Bioservices Inc. stock is now 38.73% up from its year-to-date (YTD) trading value. CDMO Stock saw the intraday high of $19.50 and lowest of $15.22 per share. The company’s 52-week high price is 22.13, which means current price is +39.58% above from all time high which was touched on 03/03/21.

Compared to the average trading volume of 671.95K shares, CDMO reached a trading volume of 3816314 in the most recent trading day, which is why market watchdogs consider the stock to be active.

What do top market gurus say about Avid Bioservices Inc. [CDMO]?

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for CDMO shares is $17.67 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on CDMO stock is a recommendation set at 1.70. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

KeyBanc Capital Markets have made an estimate for Avid Bioservices Inc. shares, keeping their opinion on the stock as Overweight, with their previous recommendation back on November 10, 2020. The new note on the price target was released on December 10, 2019, representing the official price target for Avid Bioservices Inc. stock. Previously, the target price had yet another raise to $8, while Stephens analysts kept a Overweight rating on CDMO stock.

The Average True Range (ATR) for Avid Bioservices Inc. is set at 1.72, with the Price to Sales ratio for CDMO stock in the period of the last 12 months amounting to 12.82. The Price to Book ratio for the last quarter was 18.40, with the Price to Cash per share for the same quarter was set at 0.61. Price to Free Cash Flow for CDMO in the course of the last twelve months was 198.05 with Quick ratio for the last quarter at 1.20.

How has CDMO stock performed recently?

Avid Bioservices Inc. [CDMO] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -25.85. With this latest performance, CDMO shares dropped by -12.18% in over the last four-week period, additionally plugging by 135.96% over the last 6 months – not to mention a rise of 165.07% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for CDMO stock in for the last two-week period is set at 42.11, with the RSI for the last a single of trading hit 35.31, and the three-weeks RSI is set at 46.84 for Avid Bioservices Inc. [CDMO]. The present Moving Average for the last 50 days of trading for this stock 15.86, while it was recorded at 18.02 for the last single week of trading, and 9.83 for the last 200 days.

Avid Bioservices Inc. [CDMO]: Deeper insight into the fundamentals

Operating Margin for any stock indicates how profitable investing would be, and Avid Bioservices Inc. [CDMO] shares currently have an operating margin of -17.73 and a Gross Margin at +6.59. Avid Bioservices Inc.’s Net Margin is presently recorded at -17.53.

Return on Total Capital for CDMO is now -17.37, given the latest momentum, and Return on Invested Capital for the company is -18.00. Return on Equity for this stock declined to -22.04, with Return on Assets sitting at -11.25. When it comes to the capital structure of this company, Avid Bioservices Inc. [CDMO] has a Total Debt to Total Equity ratio set at 64.09. Additionally, CDMO Total Debt to Total Capital is recorded at 39.06, with Total Debt to Total Assets ending up at 24.95. Long-Term Debt to Equity for the company is recorded at 50.71, with the Long-Term Debt to Total Capital now at 30.90.

Reflecting on the efficiency of the workforce at the company, Avid Bioservices Inc. [CDMO] managed to generate an average of -$47,144 per employee. Receivables Turnover for the company is 5.06 with a Total Asset Turnover recorded at a value of 0.64.Avid Bioservices Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.20 and a Current Ratio set at 1.40.

Earnings analysis for Avid Bioservices Inc. [CDMO]

With the latest financial reports released by the company, Avid Bioservices Inc. posted -0.11/share EPS, while the average EPS was predicted by analysts to be reported at -0.16/share. When compared, the two values demonstrate that the company surpassed the estimates by a Surprise Factor of 31.20%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for CDMO. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Avid Bioservices Inc. go to 15.00%.

Insider trade positions for Avid Bioservices Inc. [CDMO]

There are presently around $616 million, or 72.20% of CDMO stock, in the hands of institutional investors. The top three institutional holders of CDMO stocks are: BLACKROCK INC. with ownership of 3,845,408, which is approximately 0.276% of the company’s market cap and around 6.98% of the total institutional ownership; VANGUARD GROUP INC, holding 2,752,177 shares of the stock with an approximate value of $44.06 million in CDMO stocks shares; and SNYDER CAPITAL MANAGEMENT L P, currently with $40.15 million in CDMO stock with ownership of nearly 8.917% of the company’s market capitalization.

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Positions in Avid Bioservices Inc. stocks held by institutional investors increased at the end of March and at the time of the March reporting period, where 94 institutional holders increased their position in Avid Bioservices Inc. [NASDAQ:CDMO] by around 10,189,488 shares. Additionally, 40 investors decreased positions by around 4,732,353 shares, while 19 investors held positions by with 23,523,513 shares. The mentioned changes placed institutional holdings at 38,445,354 shares, according to the latest SEC report filing. CDMO stock had 44 new institutional investments in for a total of 5,177,188 shares, while 11 institutional investors sold positions of 110,735 shares during the same period.

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