AVAST (AVST) 406p

Gain to date: 35.9%

Original entry point: Buy at 298.8p, 16 May 2019

To put up a near 36% return since mid-May while the overall market has gone sideways shows how increasingly investors are talking note of the emerging potential at Avast (AVST).

Shares in the Czech-based supplier of its Avast and AVG firewall, anti-hacking, malware and anti-virus tool kits to consumers have rallied around 10% since a robust third quarter update (18 Oct) that showed an impressive 9% increase in adjusted revenue to $218.3m, after stripping out discontinued and sold-off parts of the business.

The headline equivalent for the three months to 30 September was 7.3% growth, still very good given the rather anodyne growth of many global economies.

Billings growth was similar while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rallied 8.7% to $121.9m. Guidance was reaffirmed at high single-digit revenue growth (for continuing operations) and broadly flat adjusted EBITDA margins.

This looks very much like a continuation of the company’s ongoing strong momentum, which analysts suspect is driven primarily by its core consumer desktop products. Mobile still appears to be a relatively small work in progress

SHARES SAYS: The 2020 PE has now expanded to 21.9, although potential to derive increasing revenue from its vast 435m consumer base could mean faster earnings growth than currently forecast. Still a buy.

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