Verint Systems has held up well, trading lower yearly than the Nasdaq 100. The company benefits from the accelerating trend of cloud migration and digital transformation. Workforce engagement management is expanding and fits nicely into Verint’s expertise. As the company switched to the SaaS model, cloud sales increased by over 30%, and the company inked over 100 net new logos in the first fiscal quarter of 2023.
Verint aims to reduce the capacity gap for brands as macroeconomic headwinds, such as wage inflation, talent recruitment, and workflow management optimization in the post-pandemic hybrid workforce, grow increasingly complex. Strength across all important cloud KPIs is driven by AI capabilities and automation to enhance customer experience and streamline workflows. To gain exposure to a business that benefits from tailwinds in the cloud, customer interaction, and workflow optimization, prudent investors should watch for opportune pullbacks in the price of Verint Systems‘ shares.
Release of Fiscal Q1 2023 Earnings
Verint reported its fiscal first-quarter 2023 results for the period ending in April 2022 on June 7, 2022. The company recorded a profit of $0.52 per share, beating consensus analyst projections of $0.47 by $0.05. Analyst expectations of $215.52 million were surpassed by revenues that increased by 8.6% year over year to $219.25 million.
“I am thrilled to report excellent cloud progress in the first quarter with sales and diluted EPS coming in ahead of expectations,” said Dan Bodner, CEO of Verint Systems.
Their first quarter demonstrated strength across all significant indicators, including growth and mix in New Perpetual License Equivalent Bookings and the continued migration of Bookings to SaaS. It has increased its annual guidance for cloud revenue growth from 32% to 34% because, going forward, we anticipate its cloud momentum will continue. With their extremely unique cloud platform for customer engagement, they are focused on assisting companies in closing the engagement capacity gap, which is the source of their positive momentum.
Reiterates Advice
The company reiterated its forecast for EPS of $2.50 for the entire fiscal year 2023, down from the $2.51 consensus analyst expectation. The company anticipates revenue for the entire fiscal year 2023 to range from $921.2 million to $958.8 million, versus the consensus analyst estimate of $944.11 million. Between 32% and 34%, a YoY revenue increase is predicted for cloud services.
Key Takeaways from the Conference Call
Although they increased their annual guidance by 200 basis points to 32% to 34%, CEO Bodner believes cloud momentum will continue to be robust. Companies now need a unique cloud platform for client engagement, especially in light of the recent macroeconomic challenges. The business assists brands in cutting expenses while improving consumer experiences. As the mix migrates to the cloud, cloud revenue growth has accelerated, increasing by 38% YoY. New PLR reservations increased 27% YoY.
Additionally, the company secured 26 cloud orders with a total contract value of $1 million from well-known companies like Comcast, Marriott, Zillow, and Wells Fargo. The company added approximately 100 additional logos, including those for NVIDA, KinderCare, Eastman Chemical, and St. John’s University. They listed some significant victories for the quarter, including a $3 million order from a healthcare company and a $15 million deal from a primary insurance provider.
Opportunistic Pullback Levels for Verint
A clear perspective of the terrain for VRNT stock is provided using the rifle charts on the weekly and daily time frames. The rejection of the $44.19 Fibonacci level caused the weekly rifle chart to experience an inverse pup breakdown before staging a comeback briefly. Weekly lower Bollinger bands are at the $39.46 fib, and the weekly 5-period moving average is sliding at $43.69, followed by the 15-period MA at $49.44. A small inverse pup was created by the weekly stochastic fell through the 20-band. On the breakout over $42.89, the buy trigger for the weekly market structure low occurs.
Should you buy Verint Systems Stock?
Customer engagement vendor Verint Systems Inc. had a sharp decline in share price in February 2021. This results from creating a separate public company by spinning off its Cognyte Software segment.
Although the action reduced the number of shares in the company, would the spinoff make Verint Systems stock a buy?
Do not be deceived by the price decrease of 35%. Verint’s stock prices dropped by $25.00, but its stockholders still possess approximately $30.00 worth of CGNT shares. The divided businesses can now concentrate on achieving their goals. In its press release, Verint describes itself as a “pure-play vendor of customer engagement.”
Buying Risks of Verint Systems Stock
Due to the economy shutting down numerous locations where the TSA operates, Cognyte hurt business revenues. There is less demand for monitoring systems when people cannot take flights or cruises. Masks have increased as public spaces have reopened, and demand for intelligence software has increased.
All those issues are transient, and the company will only see a short-term boost from losing that clientele at a low point. In a challenging economy, it needs to keep expanding its clients, which may be challenging.
Conclusion
A significant stock collapse occurred for Verint Systems in 2021. The data-driven business separated its government surveillance division to concentrate on call centers and other methods of client contact. The business concentrates on maintaining the consistency of your brand’s customer-facing message across all communication channels rather than searching for terrorists.
Although it’s a laudable objective, the business risked losing its government security contracts as the economy rebounded. Nevertheless, a low cost offers investors a ticket to ride for a lot less money and without the stigma of big brother.
