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Factors to Note Ahead of Verint's (VRNT) Q3 Earnings Release

By Zacks Investment ResearchStock MarketsNov 28, 2021 09:10PM ET
www.investing.com/analysis/factors-to-note-ahead-of-verints-vrnt-q3-earnings-release-200609840
Factors to Note Ahead of Verint's (VRNT) Q3 Earnings Release
By Zacks Investment Research   |  Nov 28, 2021 09:10PM ET
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Verint Systems VRNT is slated to release third-quarter fiscal 2022 earnings on Dec 2.

For the fiscal third quarter (ending on Oct 31, 2021), the company projects non-GAAP revenues in the range of $215-$220 million. The Zacks Consensus Estimate for revenues is pegged at $218.1 million, suggesting a decline of 34.2% from the year-ago quarter’s reported figure.

The company expects earnings to be 53 cents per share. The Zacks Consensus Estimate for earnings is also pegged at 53 cents per share, suggesting a decline of 48.04% year over year.

The company beat estimates in all of the last four quarters. It has a trailing four-quarter earnings surprise of 25.2%, on average.

Shares of Verint have declined 16.4% in the past year compared with the industry's return of 44.4%.

Factors to Note

Continued momentum in the cloud business is likely to drive the company’s top line in the fiscal third quarter. Steady traction for bookings, particularly new perpetual license equivalent or PLE bookings, is likely to act as a tailwind. Strength in recurring revenues also bodes well.

In the last reported quarter, the company’s PLE bookings soared 17.4% year over year to $73.1 million. The percentage of new PLE bookings from software as a service or SaaS stood at 52.6% in the fiscal second quarter compared with 43.1% reported in the prior-year quarter.

Globally, business enterprises are rapidly adopting “digital-first engagement” tactics. This is likely to have driven demand for Verint’s cloud offerings in the to-be-reported quarter. The company is adding new functionalities to its cloud platform to help clients power their staff with bots and personnel.

Increasing customer acquisitions bodes well. The company is gaining new clients through its robust customer and partner ecosystem. Also, the company’s agnostic cloud platform is helping its existing clientele to implement other Verint applications/offerings. In the last reported quarter, the company won 20 SaaS deals with a total contract value (“TCV”) greater than $1 million.

Muted growth in perpetual revenues, higher expenses and stiff competition in the SaaS space might have limited margin expansion in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Verint has an Earnings ESP of 0.00 % and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

AutoZone (NYSE:AZO) AZO has an Earnings ESP of +2.78% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoZone is set to report first-quarter fiscal 2022 results on Dec 7. The Zacks Consensus Estimate for earnings is pegged at $20.65 per share, which suggests an increase of 11% from the prior-year quarter’s reported figure.

Shares of AutoZone have rallied 59.4% in the past year compared with the Zacks Automotive- Retail and Wholesale -parts industry’s rise of 50%.

Lululemon Athletica (NASDAQ:LULU) LULU has an Earnings ESP of +1.44% and a Zacks Rank of 2.

Lululemon Athletica is scheduled to release third-quarter fiscal 2021 results on Dec 9. The Zacks Consensus Estimate for earnings is pegged at $1.39 per share, suggesting an increase of 19.8% from the prior-year quarter’s levels.

Shares of Lululemon Athletica have rallied 23.3% in the past year compared with the Zacks Textile Apparel industry’s rise of 22.8%.

PVH Corporation PVH has an Earnings ESP of +1.61% and a Zacks Rank of 2.

PVH is scheduled to release third-quarter fiscal 2021 results on Dec 1. The Zacks Consensus Estimate for earnings is pegged at $2.07 per share, indicating an increase of 56.8% from the year-ago quarter’s tally.

Shares of PVH have soared 38.5% in the past year compared with the Zacks Textile Apparel industry’s rise of 22.8%.


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Factors to Note Ahead of Verint's (VRNT) Q3 Earnings Release
 

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Factors to Note Ahead of Verint's (VRNT) Q3 Earnings Release

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