Shares of Verint Systems, Inc. (VRNT) , a data analysis software company, carried after-hours gains into Thursday’s trading. The stock has now broken out past resistance and surged to a new high on strong Q1 earnings, improved full-year guidance, and analyst upgrades.
The company’s Q1 2015 earnings report, released after the closing bell on Wednesday, showed a profit of $28 million in Q1 of fiscal 2015, or $0.51 per share. This was a major reversal when compared to a loss of $9.2 million, or $0.18 per share in Q1 2014.
In addition, revenue for the quarter had a 20.44 percent year-over-year increase to $257.4 million from $204.8 million. Excluding one-time items, adjusted earnings for the period rose to $39.5 million, or $0.72 per share, from $23.4 million, or $0.44 per share a year earlier, a 68.8 percent increase. This crushed the consensus analyst estimate for earnings of just $0.55 a share.
The excellent Q1 2015 results lead Verint to lift its outlook for the full fiscal year 2015. The company revised its guidance for fiscal year 2015 upward to a range of $3.30 to$3.50; comparing the prior of $3.20 to $3.40, and adjusted revenues of $1.11 billion to $1.16 billion. Looking forward to the full year ending January 31, 2015, the company also expects diluted earnings per share guidance by $0.10 from a range of $3.20 to $3.40, to a range of $3.30 to $3.50.
This wave of good news encouraged investors, sending shares up by over seven percent in after-hours trading. Gains continued climbing after the opening bell on Thursday, with the stock rising over 10.5 percent to almost $51.50 per share (1:42PM EDT) The stock’s intraday high at $53.19 represented a new 52-week high for the stock.
“During Q1, we experienced broad strength across many areas. Customer reaction to our combination with Kana has been very positive. Our Enterprise Intelligence segment achieved year-over-year revenue growth of 47 percent including Kana’s results, and 11 percent excluding Kana’s results,” said Dan Boner, CEO and President in a press release. “Our Communications and Cyber Intelligence segment achieved 21 percent year-over-year revenue growth. Our focus on actionable intelligence combined with our broad portfolio, position us well for long-term growth.”
Also potentially driving gains was the positive feedback coming from analysts after Credit Suisse analyst Michael Nemeroff upgraded the stock from neutral to outperform and raised his price target from $49 a share to $57. Joining Credit Suisse in improving its outlook was FBR Capital, which increased its price target from $57 a share to $60.
"The company's May quarter results were a very strong start to what we view as an important transition year for Verint, from a value story to a growth story," said Jonathan Ho, an analyst with William Blair, in a research report.
The company has a market cap of $2.52 billion. The average volume for Verint Systems has been 326,100 shares per day over the past 30 days. And its revenue growth of 8.07 percent has slightly outpaced the industry average of 7.50 percent.
Melville, New York-based Verint Systems is engaged in Actionable Intelligence solutions and value-added services. The company has two major segments-- Enterprise Intelligence Solutions and Communications and Cyber Intelligence Solutions. It serves government, law enforcement, and commercial organizations, providing them with comprising monitoring, full-time and compliance recording, desktop and process analytics, and public safety workforce optimization.
The company sells its products through its direct sales team, distributors, systems integrators, value-added resellers, and original equipment manufacturer partners. In January, Verint bought customer service software solutions company Kana Software for approximately $514 million from Accel-KKR, a move that appears at the moment to have been a strong one.
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