Shares should continue to enjoy a fair wind and a following sea Save Print this page
Customers are increasingly paying for protection against online privateers keen to appropriate personal data. Since its IPO in May last year, shares in Avast have risen 30 per cent. Its antivirus software, which can be downloaded free, is driving sales of complementary products such as Avast’s Virtual Private Network and its anti-tracking software. Ads reflecting deep knowledge of a person’s habits can easily feel like stalking.
This is generating plenty of operating cash flow, which was 6 per cent higher at $176m in the first six months. But the focus on slower-growing consumer software means a steep discount to UK cyber security peers. Avast’s enterprise value to this year’s free cash flow is 17 times, says Jefferies. Critics will point to US consumer antivirus giant Symantec.
Falling sales have made the company a Jonah to be avoided by investors. Its shares have barely moved over the past five years. Profit margins tend to be lower in the consumer sector than at companies providing business enterprise software and cloud solutions. There may be treasure buried in the internet of things, reckons Avast.
Shares up 12 per cent since the results should continue to enjoy a fair wind and a following sea.
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