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Verint Systems (NASDAQ: VRNT) decreased by more than 15% Thursday after investment bank Oppenheimer downgraded the software company, a day after it missed second-quarter results.
“We are downgrading Verint from Outperform to Perform and removing our previous $44 PT as growth continues to deteriorate and diminished expectations for the fourth quarter are heavily burdened,” Oppenheimer analysts said.
On Wednesday, Verint Systems posted earnings per share of $0.48 on revenue of $210.17 million, lowering estimates by $0.09 and $14.77 million, respectively.
The company lowered its 2024 expectations by 3% to $891.8-$928.2 million, the third cut since last year. While Verint has raised gross margin targets to maintain its non-GAAP EPS forecast of $2.65, it’s only about to break even on GAAP EPS due to low taxes and other normalizations, the brokerage noted.
Verint’s CFO Grant Highlander also gave a $267 million revenue target for the fourth quarter in the earnings call and expected gross margins to increase sequentially by 400 basis points.
“This backend-loaded forecast is due to expectations of strong unbundled SaaS renewals, which are lumpy and pre-recognized versus proportional. This volatility and possible subsequent drop-off are not positive for its multiple,” said Oppenheimer.
The brokerage also cut its 2024 and 2025 revenue estimates to $898 million and $934 million, respectively.
Verint Systems has decreased 27.30% since the start of the year and had a Buy rating from Wall Street, but was marked as Hold by Seeking Alpha’s quantitative system.
