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AD8 - Audinate Group

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Audinate is the leading provider of professional digital audio networking technologies globally.
Audinate has grown its customer base to over 350 original equipment manufacturer (OEM) brands, including many of the world’s leading professional Audio Visual (AV) equipment brands such as Bosch, Bose, Harman, Roland, Shure, Sony, Symetrix and Yamaha. Audinate's primary customers are OEM brands who design Audinate’s technology platform, Dante, into their professional audio products.

It is anticipated that AD8 will list on the ASX on 30 June 2017.

https://www.audinate.com
 
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For a security with a listing date of June 30, 2017 and an opening price of $1.50, AD8 has performed well to make an ATH yesterday of $6.89. Where to from here?
 
Where to from here?

Its price reflects the reality that its become a sustainably profitable company with a significant runway of growth.

I have not calculated a range of value for AD8 as I have never understood the business well enough to be inclined to do the deep analysis on it. A quick and dirty extrapolation of FCF suggests the current price has a lot of that potential growth well and truly baked in.
 
Its price reflects the reality that its become a sustainably profitable company with a significant runway of growth.

I have not calculated a range of value for AD8 as I have never understood the business well enough to be inclined to do the deep analysis on it. A quick and dirty extrapolation of FCF suggests the current price has a lot of that potential growth well and truly baked in.

That's interesting that you responded to my post as I was going to add after "Where to from here?" perhaps @galumay might like to comment.
I refrained, however, as I didn't know whether you would find that a bit cheeky.

Thanks for posting.
 
I refrained, however, as I didn't know whether you would find that a bit cheeky.

Not at all!

I wish I had been able to understand the technology and business better - I had a look at it when it was around $4 and asked a couple of friends in the music industry about the tech, but they were very lukewarm on it, and couldn't explain it to me in a way that made me understand it any better so I lost interest.

I know a couple of investors who are high conviction holders of AD8, but they also believe its probably got a bit ahead of itself at current levels - not that that means much in such a frothy market for anything tech related!
 
a fund manager put the case for AD8 as follows
Audinate (ASX: AD8), a digital media networking provider, raised $20 million from institutional investors this week in order to accelerate its global sales’ efforts and product initiatives. AD8's proprietary technology is embedded into a range of media devices, improving the speed and range of audio connections, while making it easy to set-up for network technicians. As a result, its digital solution is rapidly outpacing traditional analogue media technologies.

AD8 has more than four times the total number of networked audio products than its closest competitor. This provides a powerful network effect, as new media devices require synchronisation with AD8's proprietary software. As a result of this leading position, we believe AD8 will continue to see accelerated adoption within its customer base.

Furthermore, the company’s constant focus on developing new features and mechanics continues to open new market opportunities to leverage its intellectual property. This focus has already expanded its reach into video and overall media management solutions.

The company has got where it is on audio; with video likely to incorporated in the Dante product offering, it should consolidate it's hold on the market.

More on the "Network Effect" : https://www.firstlinks.com.au/joe-magyer-pricing-power-loyalty-networks/
 
just put my AD8 holding up for SELL. Might be forming a 'double top". Bought it a year and a week ago at 3.63 so $9 will do nicely.
 
One I missed, a couple of fellow investors got in fairly early, I did my research and just couldn't get any conviction about the business. Had a couple of mates in the industry I talked to, they couldn't see the value either, no one I talked to saw an actual need for what they do. I also found very few investors could actually explain in a few simple sentences what Dante was and why it had any utility.

Good luck to those like you that have made money!
 
just put my AD8 holding up for SELL. Might be forming a 'double top". Bought it a year and a week ago at 3.63 so $9 will do nicely.
When hovering over the <Market Sensitive> Announcement, and the summary states
Audinate remains well positioned to deliver long term growth
then a chill can pass over the reader. And so it came to pass; down $1.09 or 15% to $6.50 after dipping below $6 during early trade. Well positioned maybe, but not enough for a growth stock. Revenue up, profit doing even better, cashflow doing well, market awareness of the ecosystem growing. But not quickly enough, and a few 'transient' headwinds. And all that guff.

Luckily I sold my entire holding at $8.99. (wasn't greedy; didn't hang out for 9 handle)
 
AD8 re ASF 2020-04-11.png

A handy "V" reversal forming however, will the gap which formed on the path down cause a problem on the way back up.
I'm anticipating a reversal or a slowing of the upward price thrust which may result in price gathering enough momentum to push through the gap. [DNH]
 
Audinate is headquartered in Australia but has offices in the United States, UK and Hong Kong. Its flagship product is a digital audio platform called Dante which can transmit audio signals across large distances to multiple locations at once and has applications in things like public broadcasting.

Audinate had $29.3 million cash on hand at June 30, 2020. The company posted unaudited revenue of $30.3 million for fiscal 2020 and EBITDA of $2 million.

Capital Raise of $28million priced at $5.15 a share, which represented a 9.5 per cent discount to Audinate's $5.69 last close, according to terms sent out. The placement would be followed by a $12 million share purchase plan.

The money raised would go towards R&D, balance sheet strengthening, investment in additional video and software products and flexibility to pursue M&A.

( used to hold; sold at start of year )
 
When hovering over the <Market Sensitive> Announcement, and the summary states
Audinate remains well positioned to deliver long term growth
then a chill can pass over the reader. And so it came to pass; down $1.09 or 15% to $6.50 after dipping below $6 during early trade. Well positioned maybe, but not enough for a growth stock. Revenue up, profit doing even better, cashflow doing well, market awareness of the ecosystem growing. But not quickly enough, and a few 'transient' headwinds. And all that guff.

Luckily I sold my entire holding at $8.99. (wasn't greedy; didn't hang out for 9 handle)

Well done. Are you targeting a re-entry? Price?
 
I was .... But their business is public sound systems (Sort of). There would have to be some hesitation in uptake, these days?
 
I was .... But their business is public sound systems (Sort of). There would have to be some hesitation in uptake, these days?

If they have raised at a lower level than the previous raise, which I understand they have, there is only 1 place this is going and that is down, particularly in this environment.
 
a re-entry? Price?
from the press:

...Restrictions around public gatherings, which Audinate's sound technology tends to serve, have caused demand and take-up to suffer just like airlines, hotels and events businesses.
"It's a high-quality company. It's a leader in digital audio networking, clear market leadership," said Sam Twidale, a portfolio manager at DNR Capital. "They've got market share eight times the next competitor in terms of the number of devices enabled with their Dante protocol." "It becomes this common standard. It's a really strong industry position," said Mr Twidale. "It just continues to grow and the competition isn't. That moat around the business expands every year and it generates very high returns, so the gross margin's over 70 per cent."
Despite the sales slowdown, Mr Twidale said Audinate was a rare small cap as its adoption rate was soaring in an emerging technology with a long growth runway. "It's a protocol you can put into speakers, into microphones, into audio equipment so they all speak to each other as you transition from analogue to digital audio, replacing all these old legacy cables with networking cables."

The group's Dante hardware chips enable professional audio equipment (speakers, mixers, microphones) to carry audio signals over a computer network, rather than physical analog cables.

As the original audio equipment makers such as Yamaha or Bose manufacture Dante-enabled products, it has become hard for competitors to disrupt its market position.
According to Bloomberg, audio hardware giant Yamaha is the second-largest holder of Audinate shares with a stake of around 9 per cent.

On Thursday, Credit Suisse stayed "neutral" with a $5.40 valuation, and cautioned the need to raise cash despite an already strong balance sheet suggests management might be worried around risks to end-demand given its products' exposure to group events such as concerts and corporate meetings.

"The near-term valuation looks high, but you need to look at the long-term cashflows the business will generate," said Mr Twidale. "That's really the opportunity. It's a business with an addressable market over $1 billion. "There's the potential to capture a fairly large share of that at pretty decent margins given the very high gross margins they generate. So valuation is high near term, but is the near term a true reflection of the earnings capability given the market leadership it's building?"

He suggested Audinate's dominance of professional audio networking is backed by a growing network effect as equipment manufacturers embrace its technology to leave competitors out in the cold.


After the raising it could have a net cash position around $68 million, with a pro forma 72.7 million shares on issue to equal a market value around $404 million. Audinate's chief executive told investors the funds raised will be used for further investment in new products including digital video networking and software that helps controllers manage sound networks at sports stadiums.
https://www.afr.com/markets/equity-...redentials-boosted-by-raising-20200723-p55epj
 
It’s an interesting industry (I’m in it and utilise Dante).
I have seen some large organisations use this as a time to fit out their venues while not under normal operating conditions. I have also seen many caution unnecessary spending.

I currently hold and will look to early next month to see if i’ll participate. I got in at the same price looking toward the long term.
 
Still all narrative and no meaningful business IMO! Stonk on.

Whilst the SP is likely to tank in the short to medium term, that's not necessarily a complete negative if one is patiently waiting to invest for the long term. It's still much more effective technology than the rear vision mirror you snaffled from the old Camry... that's a given.
 
AD8 reported today. I wonder if the news was good?
(hint; professionals sell at close?)
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Key FY20 highlights:
• Revenue of A$30.3million, up 7.1% (US$20.4 million)
• Gross profit (GP) of A$23.2 million, up 10.1% – improved GP margin of 76.6%
• EBITDA of A$2.0 million
• Net loss after tax of A$4.1 million, includes A$3.6 million tax losses written off
• Operating cashflow of A$4.8 million, up from A$3.6 million in FY19
• Cash on hand at 30 June of A$29.3 million, plus A$40 million gross proceeds from equity raised since year end
• Dante enabled products up 31% to 2,804 – a key leading indicator of future growth
 
I owned this stock for a little while some time ago. It's been on my watch list for a while. The volume today is interesting. Damn, I'm totally fully invested. I actually had to sell down some NCM today because I had used up all the cash in my bank account.

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