Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On Feb 20, 2014, we issued an updated research report on Amdocs Ltd. (DOX - Analyst Report). The company has won significant managed service contracts in the economically volatile European region. We believe that the long-term fundamentals of the company are intriguing due to the transition of the telecom industry to converged IP solutions.

Amdocs has delivered positive earnings surprise in two of the last four quarters, with an average surprise of negative 8.14%. The company reported mixed financial results for the first quarter of fiscal 2014. The company’s earnings came in line with the Zacks Consensus Estimate. However, revenues beat the same.

Amdocs’ business opportunity in the U.S. is more visible after stabilization of businesses with AT&T Inc. (T - Analyst Report) and renewal of long-term contracts with several leading telecom and cable TV operators like Comcast Corp. (CMCSA - Analyst Report). Moreover, it has also signed a 5-year global managed services agreement with Vodafone Group plc. (VOD - Analyst Report). The new deal will help the carrier optimize its customer care and billing activities.

Recently, Amdox acquired privately-held Actix, a leading provider of software for mobile network optimization. Also, Amdocs took over Calcite – a leading provider of network management and self optimizing network solutions. These acquisitions will enhance Amdocs’ CES portfolio across telecom networks and information technologies. Moreover, a strong cash position coupled with increased free cash flow will help Amdocs pursue future acquisitions.

On the flipside, Amdocs is experiencing high customer concentration. Three major clients, namely, AT&T, Sprint and BCE Inc. together accounted for over 50% of the company’s total revenue. Loss of any of these customers will result in significant erosion of the top line.

Moreover, consolidation trend in the U.S. telecom industry may significantly affect the company going forward. The merger of Sprint with the Japanese telecom operator Softbank and Sprint’s acquisition of Clearwire may affect Amdocs’ top line. T-Mobile USA has acquired MetroPCS and AT&T has decided to acquire Leap Wireless. All these collaborations are likely to have material effect on Amdocs.

Amdocs currently has a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%