Audinate (ASX Code AD8) is a global provider of professional audio and video technology equipment. Until recently, AD8 were well known for their audio platform known as Dante. In layman’s terms, Dante replaces physical cables and connections between audio and visual equipment thereby allowing the devices to wirelessly “speak” to each other with near-zero lag and near-flawless quality. AD8 was a covid victim as live events were put on hold globally, but has seen a strong bounce back in FY23, with record revenue exceeding broker expectations in December.
Diverse range of applications for Dante
Dante technology is integrated into millions of devices, in thousands of audio-video installations around the world:
New Dante Video
AD8 is the dominant player with their audio networking technology. More recently, AD8 have released a video solution offering to complement their audio technology which is twice the size of the audio market. An even more significant opportunity than video lies in the software services for professional AV users. The entire addressable market is said to be worth around US$2 billion, with AD8 currently holding a 9% share. It is difficult to predict what AD8 can capture but they clearly have a significant growth runway as they build on leadership in audio and extend influence across the AV networking ecosystem. Taken together, this is strategically important for AD8, and if they get the execution right, it potentially sets them up to more than double their addressable market.
Technicals
We’ve been watching this stock for some time as it’s a perfect example of a stock in a nice smooth uptrend (higher highs and higher lows).
We can see a simple trendline has developed and it’s clearly noticeable each time price has touched the trendline, price has bounced off and continued the uptrend. So each time the stock has touched the trendline (see 1, 2 & 3), the stock is signalling an opportunity exists for a potential entry point at these key demand areas.
Although, with any strong trend, the steeper the angle, the higher the risk. A slight undercut below the trendline would not be a concern however a major break would. A strong undercut would provide a signal communicating that the once strong demand area is no more.
TRADE ACTION
Number of shares: 300
Entry: Buy up to $16.30
Stop Loss: $14.75
Target: No Target
