Jefferies has maintained a Hold rating on Verint Systems (NASDAQ: NASDAQ:VRNT) but lowered the price target from $32.00 to $28.00.
The adjustment followed the company's reported earnings, which fell short of expectations, with total revenue down by 1% and earnings per share (EPS) by 7%.
The shortfall was attributed to a delay in an unbundled Software as a Service (SaaS) deal.
Despite the earnings miss, Verint management confirmed their fiscal year 2025 (FY25) targets for revenue and EPS. They also noted that the pipeline for their Bot products remains strong. However, the forecast for bundled SaaS growth by FY25 is still set at 14%, which is below the approximately 20% target set in December.
The company's leadership emphasized that the recent results were not influenced by macroeconomic factors or disruptions in the artificial intelligence (AI) space. The affirmation of future targets suggests confidence in the company's strategic direction, despite the current challenges.
In other recent news, Verint Systems reported second-quarter results, missing both the top and bottom line consensus estimates. The company posted an adjusted earnings per share of $0.49, falling short of the expected $0.53, and reported revenue of $210.17 million, below the consensus estimate of $212.81 million.
Despite these figures, Verint highlighted a 40% year-over-year increase in artificial intelligence (AI) bookings and a 15% acceleration in bundled SaaS revenue growth.
Evercore ISI adjusted its outlook on Verint Systems, reducing the price target to $30 from $34, while maintaining an In-Line rating. The adjustment was due to a $1.5 million deal delay and mixed results for the second quarter.
However, Verint's management reiterated their fiscal year 2025 revenue guidance at approximately $933 million, indicating around a 5% year-over-year growth at the midpoint, and an earnings per share (EPS) of $2.90.
The report also highlighted a 10.7% year-over-year increase in Total Software as a Service (SaaS) Annual Recurring Revenue (ARR), with net new ARR rising by 113% to $18.8 million. Verint has updated its strategy to allow legacy and unbundled SaaS customers to deploy AI bots, a capability previously exclusive to bundled SaaS customers.
InvestingPro Insights
In light of the recent earnings report from Verint Systems (NASDAQ:VRNT), it's valuable to consider additional insights from InvestingPro. The company's aggressive share buyback strategy, as noted in one of the InvestingPro Tips, signals a management belief in the company's intrinsic value. This is further supported by the fact that Verint has been profitable over the last twelve months and analysts forecast net income to grow this year. With a high shareholder yield, these factors may appeal to investors seeking companies with positive buyback policies and profitability prospects.
InvestingPro Data shows a market capitalization of $1.84 billion and a price-to-earnings (P/E) ratio of 62.77, which suggests a premium valuation. The revenue for the last twelve months as of Q1 2025 stood at $915.1 million, with a modest growth rate of 1.58%. Despite the recent price target adjustment by Jefferies, the fair value estimates from analysts and InvestingPro place Verint at $38 and $42.98, respectively, indicating potential undervaluation at the current price of $29.87.
For those interested in deeper analysis, additional InvestingPro Tips are available, which provide a comprehensive understanding of Verint's financial health and market position. These tips, which include insights into earnings multiples and profitability, can be found at https://www.investing.com/pro/VRNT.
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