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Investing.com - Verint Systems (NASDAQ:VRNT) stock rose approximately 10% on Wednesday following a Bloomberg report that the company is in discussions with private equity firm Thoma Bravo. The surge comes as InvestingPro data shows the stock trading below its Fair Value, despite a challenging six-month period that saw shares decline by over 30%.
Evercore ISI has maintained its "In Line" rating on Verint with a $23.00 price target, according to analyst notes released Wednesday. The firm indicated that Verint has declined to comment on the reported talks, making any current discussions "purely speculative." InvestingPro data reveals analyst targets ranging from $23 to $33, with several analysts recently revising their earnings expectations downward.
Verint’s capital structure includes approximately $413 million in debt as of April, primarily consisting of $315 million in convertible senior notes due April 2026 and roughly $100 million drawn from a $500 million revolving credit facility. Management has previously stated intentions to retire the convertible notes using proceeds from the revolver. According to InvestingPro, the company maintains a FAIR financial health score of 2.29, though short-term obligations currently exceed liquid assets. Get access to 8 more exclusive ProTips and comprehensive analysis in the Pro Research Report.
The company also carries $400 million in convertible preferred stock held by a single investor, divided into two equal tranches: Series A with a conversion price of $36.38 and Series B at $50.35. With Verint’s current stock price below these conversion thresholds, Evercore notes the preferred shares effectively function as debt-like obligations senior to equity.
If hypothetically converted at prices above both conversion thresholds, the preferred stock would result in approximately 9.5 million additional shares, bringing Verint’s fully diluted share count to approximately 72 million shares.
In other recent news, Verint Systems Inc. reported its Q1 2025 earnings, revealing a revenue of $208 million, which exceeded analyst expectations of $195.03 million. However, the company’s earnings per share (EPS) fell short at $0.29 compared to the anticipated $0.34. Meanwhile, Verint is reportedly in advanced acquisition talks with Thoma Bravo, a private equity firm, considering an offer of approximately $26 per share. This potential acquisition is still under review, with no certainty of finalization. Additionally, Verint has been exploring a potential sale amid challenges posed by AI disruptions in the customer service sector. Despite these challenges, Verint’s AI Annual Recurring Revenue (ARR) showed a 24% year-over-year growth, indicating strong AI-driven growth. Analyst firms such as Needham and Evercore have shown interest in Verint’s strategic direction and AI adoption, reflecting cautious optimism about the company’s future performance.
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