Jefferies Adjusts Price Target for Verint (VRNT) Following Q4 Results | VRNT Stock News

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May 23, 2025
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Analyst Samad Samana from Jefferies has revised the price target for Verint (VRNT, Financial), lowering it from $32 to $19. The firm maintains a Hold rating on the stock. This adjustment comes after the company updated its financial model to account for the fourth-quarter results and guidance for fiscal 2026.

Wall Street Analysts Forecast

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Based on the one-year price targets offered by 6 analysts, the average target price for Verint Systems Inc (VRNT, Financial) is $29.50 with a high estimate of $33.00 and a low estimate of $23.00. The average target implies an upside of 75.60% from the current price of $16.80. More detailed estimate data can be found on the Verint Systems Inc (VRNT) Forecast page.

Based on the consensus recommendation from 7 brokerage firms, Verint Systems Inc's (VRNT, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.

Based on GuruFocus estimates, the estimated GF Value for Verint Systems Inc (VRNT, Financial) in one year is $37.10, suggesting a upside of 120.83% from the current price of $16.8. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Verint Systems Inc (VRNT) Summary page.

VRNT Key Business Developments

Release Date: March 26, 2025

  • ARR Growth: 5% in Q4, ahead of 4% guidance; forecasted 8% growth for Q4 '26.
  • Q4 ARR: $712 million, up 5% year-over-year.
  • ARR Outlook for Q4 '26: Raised to $768 million, reflecting 8% growth.
  • SaaS ACV Bookings: 30% growth year-over-year in Q4, reaching $32 million.
  • Bundled SaaS Revenue Growth: Accelerated from 9% in Q1 to 23% in Q4; 17% growth for the year.
  • Cash Contribution for Fiscal '25: $228 million, a 2% increase year-over-year.
  • Free Cash Flow Increase: 4% year-over-year.
  • Q4 Revenue: $254 million, below guidance of $277 million due to unbundled SaaS deals not materializing.
  • Revenue Guidance for Fiscal '26: $960 million with a range of plus or minus 3%.
  • Non-GAAP Diluted EPS Guidance: $2.93 at the midpoint.
  • Gross Margin Expectation: Around 73% at the midpoint of revenue guidance.
  • Q1 Fiscal '26 ARR Growth: Expected to accelerate to 6% year-over-year.
  • Q1 Fiscal '26 Revenue Range: $190 million to $200 million.
  • Q1 Fiscal '26 Non-GAAP Diluted EPS: Expected to be $0.13.
  • Stock Buyback Program: New $200 million program started in September.
  • Revolver Increase: Increased to $500 million, term extended to 2030.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Verint Systems Inc (VRNT, Financial) reported a strong AI momentum, with ARR growth reaching 5%, surpassing the guidance of 4%.
  • The company raised its ARR outlook for fiscal '26 from $760 million to $768 million, reflecting an 8% growth.
  • Verint's AI solutions are delivering strong and differentiated business outcomes, with customers reporting significant ROI, such as a healthcare insurer achieving a $70 million increase in agent capacity.
  • The hybrid cloud approach allows customers to adopt AI without disrupting existing operations, leading to faster AI outcomes.
  • Verint's top 25 customers showed a 24% ARR growth, indicating strong adoption and expansion of AI solutions among large clients.

Negative Points

  • Revenue for Q4 came in at $254 million, below the guidance of $277 million, primarily due to unbundled SaaS deals not materializing as expected.
  • The company faces challenges in predicting the mix of unbundled and bundled SaaS bookings, leading to a wider revenue guidance range of plus or minus 3%.
  • Some large unbundled SaaS deals were pushed into fiscal '26, impacting revenue expectations for the current quarter.
  • Despite strong ARR growth, the revenue trends fluctuated due to the timing of unbundled SaaS revenue, making quarterly revenue trends less meaningful.
  • The company acknowledges that its channel partners are not yet fully autonomous in selling AI solutions, relying heavily on Verint's direct sales force for expertise.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.