- Giugno 29, 2022
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
New York-based Verint Systems sells software and hardware products for customer engagement management and business intelligence. VRNT stock has lost 16.7% year-to-date compared to losing 3.3% over the past year.
Eyal is highly optimistic about VRNT stock with a Buy rating and a $75 price target, which implies 71.1% upside potential to current levels. Eyal’s price target is based on five times his FY24 estimated revenue.
Other Wall Street analysts also have a Strong Buy consensus rating on VRNT stock based on four Buys and one Hold. The average Verint Systems price target of $63.80 implies 45.6% upside potential to current levels.
Eyal was impressed by Verint’s virtual investor day held on June 9. The analyst noted that Verint’s cloud transition is helping to expand margins, improve cash flows, and is tracking ahead of its three-year plan. As per Eyal, Verint’s artificial intelligence (AI) and automation allow improved labor efficiencies and enable clients to more effectively realize return on investment (ROI).
Moreover, Eyal stated that Verint’s One Workforce eliminates silos and automates processes, thereby providing enhanced synergies of previously siloed engagement personnel and tools (e.g., bots).
Lastly, Verint’s new commercial model, Da Vinci application programming interface (API), enables partners to create and bring to market new applications leveraging VRNT’s AI, thus furthering customer stickiness.
According to Eyal, Verint earns higher gross margins (mid 70%) from recurring revenue compared to perpetual customers. As the contribution from recurring mix rises, VRNT’s gross margins should enhance towards the mid 70%s and cashflows should also accelerate.
Interestingly, Eyal has given consistent Buy ratings on VRNT stock since 2010 with a success rate of 65% and generated an average return per rating of 26.4%.
