This software company focuses on cyber-security and walloped earnings estimates last quarter.
Verint Systems (VRNT)
from The Periscope Report
Our top stock pick for 2015 is Verint Systems (VRNT), which creates “Actionable Intelligence” solutions that 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.
After the 1Q of fiscal 2016 closed, management affirmed its revenue guidance for fiscal 2016, with growth in a range of 9% - 13% to $1.20 - $1.25 billion. Net earnings are expected in the range of $3.55 - $3.75 per share. For the 1Q of fiscal 2016 (ended April), revenue was flat YoY at $270.4 million; however, the 1Q of the year is seasonally the weakest. On a Non-GAAP basis, Net Income increased 5% to $41.3 million, or $0.66 per share, which clobbered estimates for $0.54 per share. VRNT has beat earnings estimates eight quarters in a row, or every quarter since we recommended the stock.
For the 1Q of fiscal 2016, Cash Flow from Operations was $66.6 million, up from $54.0 million a year ago. CEO Dan Bodner told us that he expects strong sequential revenue growth of at least $20 million in the 2Q and he is targeting double digit revenue growth for the full year on a constant currency basis.
The total addressable market for VRNT is now $8 billion in two Actionable Intelligence growth areas: customer engagement optimization and security intelligence. Management expects to increase the average headcount by 100 – 150 people every quarter this year; most of those will be new salespeople. The company has the best software in the industry for thwarting cyber attacks and detecting terrorist activity, 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 7, 2015