On Friday, Verint Systems Inc. (NASDAQ:VRNT) saw its price target increased by Jefferies from $25.00 to $30.00, while the firm kept a Hold rating on the stock. The adjustment follows a reassessment of the company's financial projections and future free cash flow (FCF) expectations.
According to the firm, Verint Systems is now anticipated to achieve revenues of $930 million for Fiscal Year 2025, marking a 2% year-over-year increase. For Fiscal Year 2026, revenues are projected to rise to $971 million, which would represent a 4.5% year-over-year growth.
These figures show a slight decrease from the pre-fourth quarter results, which estimated revenues at $948 million for FY25 and $989.5 million for FY26.
The analyst also provided updates on earnings per share (EPS) and free cash flow forecasts. The EPS estimate for FY25 has been slightly reduced to $2.81. Still, the free cash flow expectations remain optimistic, with projections of approximately $180 million in FY25 and nearly $600 million over the next three fiscal years, aligning with the management's targets.
The rationale behind the increased price target is attributed to the anticipated greater free cash flow and a higher terminal value in the firm's discounted cash flow (DCF) analysis. The DCF is a valuation method used to estimate the value of an investment based on its expected future cash flows.
This revised financial outlook by Jefferies reflects a more detailed analysis post the company's fourth-quarter results, providing investors with updated guidance on Verint Systems' financial health and performance expectations.
InvestingPro Insights
In light of the recent financial assessments by Jefferies, Verint Systems Inc. (NASDAQ:VRNT) has shown some promising indicators worth noting. According to real-time data from InvestingPro, Verint Systems boasts a robust Gross Profit Margin of 70.34% for the last twelve months as of Q4 2024, underscoring the company's efficiency in managing its cost of goods sold and indicating a strong potential for profitability.
Furthermore, the company's share performance has been noteworthy, with a significant 6 Month Price Total Return of 49.93%, reflecting investor confidence and a positive market response to the company's strategic initiatives.
This aligns with one of the InvestingPro Tips highlighting that Verint Systems is expected to be profitable this year, which is a key consideration for investors looking for growth opportunities.
With management's aggressive share buyback strategy, as noted in another InvestingPro Tip, shareholders could potentially benefit from increased share value and a high shareholder yield. These strategic moves by Verint Systems suggest a proactive approach to enhancing shareholder value.
Investors interested in further insights and analysis can explore additional InvestingPro Tips for Verint Systems at https://www.investing.com/pro/VRNT. There are 13 more tips available that could provide a deeper understanding of the company's financial position and future prospects. For those who wish to access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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