I think FTSE 100 incumbent Avast (LSE:AVST) is one of the best tech shares around. With its track record and results, could the Avast share price be an opportunity right now?
FTSE 100 tech giant
Avast specialises in cyber security. It is well-known for its free antivirus software for home users. It also offers much more bespoke and complex paid security solutions for home and business users.
Despite only floating on the London stock market in 2018, the 30-year-old Avast has a positive track record. Performance has remained robust since its initial public offering and its share price was performing well prior to the crash.
Avast share price journey
There is lots to like about Avast, in my opinion, not just its current price point. Firstly, I really like that its founders are still involved in the business and own over 30% of stock, which equates to close to £1.7bn. In addition to the founders, current CEO Ondrej Vlcek is also a shareholder and joined the firm over 25 years ago.
Next, Avast’s performance has been nothing short of excellent in my eyes. Revenue and profit have been increasing year-on-year for the past five years. Operating profit has tripled since 2015, in fact. Since 2018, it has risen by over 30%, which is impressive.
Avast believes the market for its products is growing by close to 10% year on year. I believe Avast can take advantage of enough market share to continue its growth and deliver profit too.
When Avast shares floated on the stock market, they began with a price of 241p. At current levels of 459p, that is a 90% increase. Before the market crash, they were trading for nearly 550p per share. Last summer, they nearly hit 6,00p per share. At the current price point, I believe the FTSE 100 cyber security provider represents a great opportunity. I only see its share price growing as it continues to grow itself. I wouldn’t be surprised if it reached nearly 600p per share once more.
Risk and reward
My biggest concern with the Avast share price is its competition and market reach just now. There are other major players in the market that may be better known, such as Norton and Kaspersky to name a couple. These rivals’ presence and better brand awareness may affect Avast’s growth.
A lesser concern is the fact Avast did not seem to capitalise on the home working surge last year. Revenue only rose 7.9% for 2020. This could be linked to people veering towards more established brands.
Overall, I believe the Avast share price is a one of the best FTSE 100 opportunities for the long term. Here at the Motley Fool, we believe in investing for the long term. I think Avast will continue to grow and its market share will increase too. It is backed by founders and run by a CEO who have all invested their own money, which I like. Furthermore, broker forecasts for 2021 price the stock at 17.5 times earnings and a potential dividend yield of close to 3%. It is worth remembering forecasts can change based on future developments. There is definitely growth potential in my eyes and I am seriously considering adding it to my portfolio right now.
Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Avast Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.