Verint Rises On FY21 Guidance Beat; Needham Lifts PT

Shares of Verint Systems are up 3.2% in Thursday’s pre-market session after the analytics company resumed its fiscal 2021 guidance, which came ahead of the Street’s estimates. In addition, Verint Systems also delivered better-than-expected third-quarter results.

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Verint (VRNT) expects its FY21 revenue to be $1.28 billion, beating the Street’s estimates of $1.27 billion. Moreover, it projects FY21 EPS to be $3.40, exceeding analysts’ estimates of $3.37.

Coming back to the 3Q results, the company reported earnings of $1.02 per share that increased 8.5% year-over-year and surpassed the Street’s estimates of $0.80 per share. Its revenues increased 1% to $328.2 million and beat analysts’ estimates of $317.1 million.

Verint’s CEO Dan Bodner said, “In Q3, we experienced another strong quarter of cloud revenue growth and continued to win new cloud customers and displace competitors due to our product differentiation and partner agnostic strategy.” Bodner further said, “Looking forward, next year we expect our cloud revenue growth to accelerate and to substantially complete our cloud transition.”. (See VRNT stock analysis on TipRanks)

Following the results, Needham analyst Ryan MacDonald raised the stock’s price target to $66 (16.9% upside potential) from $64 and maintained a Buy rating. The analyst said, “the company reported upside to expectations as Customer Engagement [CE] and Cyber Intelligence [CI] showed signs of recovery.”

The analyst added that the “separation of the two businesses remains on track to occur after the completion of FY21 and management provided a 3-year framework for revenue growth in each business that will see 30%+ for CE cloud and 10%+ growth for CI. When combining this with the expectation of post-split synergies, we are confident that Verint can deliver accelerating growth and margin expansion.”

Meanwhile, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus. The average price target stands at $69 and implies upside potential of about 22% to current levels. Shares have increased by about 2% year-to-date.