Verint Systems (VRNT 50)
By The Periscope Report
Verint Systems (VRNT) refers to its business as “Actionable Intelligence” solutions, that help organizations address three important challenges: Customer Engagement Optimization; Security Intelligence; and Fraud, Risk and Compliance. The software allows customers to capture large amounts of information from numerous data types and sources, use analytics to glean insights from the information, and leverage the resulting Actionable Intelligence to help achieve their customer engagement, enhanced security and risk mitigation goals. One of the main functions of the software is to identify/thwart terrorist activity.
For the fiscal year ended January 2015, management raised its guidance, to non-GAAP revenue in the range of $1.11 - $1.16 billion, up $30 million from prior guidance. Net earnings are expected in the range of $3.30 - $3.50 per share, up ten cents from prior guidance.
At $49, the stock is trading for 14 times that estimate, which we think is cheap for a company growing at 30%+ for the last three years.
On the conference call, CEO Dan Bodner said the 1Q came in much higher than expected, which caused him to raise guidance for the full year.
The Enterprise Intelligence segment achieved YoY revenue growth of 47% including the acquisition of KANA, and 11% excluding KANA’s results. The Communications and Cyber Intelligence segment achieved 21% YoY revenue growth.
VRNT has established itself as the leader for detecting and stopping malware and cyber attacks. VRNT has more “big data intelligence” than any competitor. The market opportunity for malware and cyber security is $6 billion.
On March 31, 2014, VRNT acquired UTX Technologies for $84 million. UTX provides mobile device tracking solutions for security applications. UTX is based in the Europe, the Middle East and Africa (EMEA) region and is being integrated into the Communications Intelligence segment. UTX did not contribute any revenue in the 1Q.
VRNT is in serious growth mode. The company has the best software in the industry for thwarting cyber attacks and detecting terrorist activity. These are two good reasons to keep buying this market dominator.
Tom Byrne, The Periscope Report, 4025 Sunset Ridge Drive, Canyon Ferry Crossing, Helena, MT 59602, 406-465-4663, July 2014