RBC Capital cuts Verint Systems price target to $29, keeps Outperform

On Thursday, RBC Capital Markets adjusted its outlook on Verint Systems (NASDAQ:VRNT) stock, reducing the price target to $29 from the previous $36 while maintaining an Outperform rating. The stock, currently trading at $19.20, sits near its 52-week low of $20.67, despite showing positive revenue growth of 4.45% over the last twelve months. The adjustment comes in response to the company’s mixed quarterly results, which highlighted a focus on ratable results and continuing timing issues affecting non-ratable outcomes. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.

The company’s financial guidance range has widened, an indication that the current trends are expected to continue through the fiscal year 2026. With a healthy gross profit margin of 71.5% and projected earnings of $3.36 per share for fiscal 2025, RBC Capital analysts anticipate a second-half financial performance similar to that of recent years, driven by the renewal portfolio.

Despite these challenges, RBC Capital remains optimistic about Verint Systems’ positioning in the market, particularly regarding the potential for AI bots. The analyst’s commentary underscores the nascent stage of AI bot adoption among Verint’s customer base, with expectations for growth over time.

The revised price target of $29 reflects a recalibration based on lowered estimates and a compression of peer multiples. This adjustment takes into account the company’s current financial trajectory and market conditions.

Verint Systems, known for its customer engagement and cyber intelligence solutions, is navigating a shifting landscape where ratable revenue streams are becoming increasingly significant. The company’s focus on AI bots is part of a broader strategy to capitalize on emerging technological opportunities.

In other recent news, Verint Systems reported its fourth-quarter 2025 earnings, missing both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.99, falling short of the anticipated $1.27, while revenue was $254 million, below the forecasted $276.99 million. Despite these shortfalls, Verint raised its fiscal 2026 Annual Recurring Revenue (ARR) outlook to $768 million, indicating an 8% growth. Analysts from Needham and Evercore ISI revised their price targets for Verint, with Needham lowering it to $30 but maintaining a Buy rating, and Evercore ISI reducing it to $23 while keeping an In Line rating. Both firms attributed the earnings miss primarily to delays in unbundled deals, which are expected to close in fiscal year 2026. Verint’s ARR showed positive momentum, growing 5% year-over-year, which was ahead of the forecasted 4%. The company also experienced a 30% year-over-year increase in fourth-quarter SaaS Annual Contract Value (ACV) bookings. These developments highlight Verint’s focus on AI-powered customer experience solutions, with management emphasizing ongoing demand for their offerings.

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