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On Thursday, TD Cowen’s analysts revised their outlook on Verint Systems (NASDAQ:VRNT), now trading at $19.17 and near its 52-week low, reducing the price target from $33.00 to $36.00, while still recommending the stock as a Buy. The adjustment followed Verint’s fourth-quarter revenue and earnings per share (EPS), which fell short of the Street’s expectations. According to InvestingPro data, the company maintains a healthy gross margin of 71.52% despite recent challenges. The company reported $253 million in revenue and $0.99 EPS, missing the anticipated $277 million and $1.27, respectively. The shortfall was attributed to the delay of several contracts from existing customers.
Despite the revenue miss, Verint’s Annual Recurring Revenue (ARR) guidance for fiscal year 2026 was slightly raised, indicating an 8% year-over-year growth to $768 million. Management remains confident that the delayed U.S.-based contracts will be secured during FY26 and beyond. InvestingPro analysis reveals that management has been actively buying back shares, demonstrating confidence in the company’s prospects. Subscribers can access 5 additional exclusive ProTips and comprehensive valuation metrics for VRNT. The company’s long-term financial strategy, referred to as the "rule of 40," which aims for a combination of 10% growth and 30% margins, is reportedly still on track.
The analysts at TD Cowen expressed continued support for Verint’s stock, citing the long-term artificial intelligence (AI) opportunities that lie ahead. They acknowledged that the deferred contracts might cause some concern among investors but emphasized their positive outlook based on the company’s future prospects. The price target was set at approximately 2.6 times their estimated fiscal year 2027 revenue.
Verint Systems, a company specializing in customer engagement and cyber intelligence, has been navigating the challenges of contract timing while focusing on its growth and profitability metrics. The company’s revised ARR guidance suggests confidence in its business model and the demand for its AI-driven solutions despite the recent hiccup in contract finalizations. InvestingPro’s Fair Value analysis indicates that VRNT is currently undervalued, with strong free cash flow yield supporting its investment case. Discover detailed insights and access the comprehensive Pro Research Report, available for over 1,400 US stocks, to make more informed investment decisions.
In other recent news, Verint Systems reported a fourth-quarter earnings miss, with earnings per share (EPS) at $0.99, falling short of the expected $1.27, and revenue at $254 million, below the anticipated $276.99 million. Despite this, the company raised its fiscal 2026 Annual Recurring Revenue (ARR) guidance to $768 million, marking an 8% growth. Analysts from RBC Capital, Needham, and Evercore ISI adjusted their price targets for Verint, with RBC Capital setting it at $29, Needham at $30, and Evercore ISI at $23, while all maintained their respective ratings on the stock. The earnings shortfall was attributed to delays in several large unbundled deals, which are expected to close in fiscal year 2026. Verint’s ARR grew by 5% in the fourth quarter, surpassing the forecasted 4%, and its bundled SaaS revenue saw a 17% increase for the full year. Analysts highlighted the importance of focusing on ARR as a key metric, with Evercore ISI noting it as a more reliable indicator of underlying growth. Verint continues to emphasize its AI-powered solutions, with over 90 Fortune 500 companies utilizing its AI bots, and expects AI adoption to drive further growth.
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