Shares in small-cap technology company Audinate Group Ltd (ASX: AD8) are down 1% following its Annual General Meeting (AGM).
About Audinate
Audinate is a global provider of digital Audio-Visual (AV) networking technologies.
Dante is Audinate’s technology platform that distributes digital audio signals over computer networks. Audinate’s solutions are utilised across thousands of installations within the professional AV market, which includes the Sound Reinforcement, Broadcast, and Recording segments.
The seeds of the company were sown in Sydney, Australia, where a small team of engineers was designing new technologies for Motorola Research Labs. Motorola shuttered the facility in 2003, but a few members of the team stayed together and in 2006 Audinate was born.
Audinate’s AGM
Audinate Chairman David Krall opened the AGM, thanking his staff for their passion, drive and teamwork. He also thanked shareholders for their continued commitment and support for the recent $24 million capital raising and the recently departed CEO Lee Ellison, who retired last month.
Audinate’s new CEO Aidan Williams provided a presentation and update on the company’s activities, stating that Audinate is driving the transformation of the AV industry with :
- Networked digital connectivity replacing traditional, point-to-point analog cabling in the AV industry, and
- Software-based AV systems replacing hardware AV systems, in the next wave of industry transformation
Audinate estimates the total addressable market (TAM) exceeds $ 1 billion and, to date, the company is estimated to have only 7% market share.
With that, management believes they have the foundations in place to accelerate their product development and support the AV industry’s transition to software networking. To assist in this Audinate is investing heavily to double their engineering and R&D functions over the next two years.
Is It Time To Buy Audinate Shares?
It’s been a great ride for original Audinate shareholders since the company’s ASX listing, with the shares up 600%. By comparison the S&P/ASX Emerging Companies Index (ASX: XEC) is up 26%.
In its FY19 result, the company announced an EBITDA result of $2.8 million. With a market cap of $500 million and using traditional share valuation metrics, the company does not look cheap. However, should Audinate rapidly increase its market reach in the coming years, the shares may well prove to be good value from here.
I think Audinate is one to keep an eye on and I have owned shares in the company in the past. However, for some investors, it should be considered a high-risk option. Therefore, you may be more interested in the shares in the free investing report below.
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