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Why Is Amdocs (DOX) Down 5% Since the Last Earnings Report?

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More than a month has gone by since the last earnings report for Amdocs Limited (DOX - Free Report) . Shares have lost about 5% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Amdocs Beats Q3 Earnings Estimates, Revenues in Line

Amdocs reported healthy third-quarter fiscal 2017 earnings (on an adjusted basis) of $1.02 a share which topped the Zacks Consensus Estimate of 96 cents.

On a GAAP basis, the company’s earnings came in at $119.3 million or 81 cents per share compared with $105.1 million or 71 cents in the prior-year quarter.

Quarterly Performance

Amdocs’ total revenue came in at $967 million, up 3.9% year over year. The improvement in revenues resulted from impressive execution across multiple dimensions of its business and continuous project wins. The top line matched the Zacks Consensus Estimate.

The company’s 12-month order backlog at the end of the fiscal third quarter was $3.22 billion, up $10 million from the prior quarter. Non-GAAP operating income was approximately $167.2 million, up 4.6% year over year. Non-GAAP operating margin for the quarter was 17.3%.

Segmental Results

Managed Service revenues totaled $496.3 million compared with $479.2 million in the year-ago quarter. Customer Experience revenues were $954.8 million compared with $908.1 million in the year-earlier quarter. Systems Directory revenues were $11.9 million compared with $22 million in the year-ago period.

Geographically, revenues from North America were $637.9 million, up 7.8% from the year-ago period. Europe recorded revenues of $125.2 million, down 0.87% year over year. Rest of the World generated revenues of $203.6 million, down 4% year over year.

Liquidity

Free cash flow for the fiscal third quarter was $134 million. Cash and cash equivalents and short-term interest-bearing investments were $963 million.  Cash flow from operations for the first nine months of the fiscal year was $437.1 million.  The company repurchased $90 million shares during the fiscal third quarter.  

Financial Outlook

Management expects revenues in the range of $955–$995 million in the fourth-quarter fiscal 2017. Earnings per share (EPS) on a GAAP basis are expected between 68 and 76 cents, while non-GAAP EPS are projected in the 91–97 cents range.

For fiscal 2017, the company remains on track to deliver non-GAAP EPS year-over-year growth of 5.5% to 7.5%.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the past month as none of them issued any earnings estimate revisions.

Amdocs Limited Price and Consensus

 

Amdocs Limited Price and Consensus | Amdocs Limited Quote

VGM Scores

At this time, the stock has an average Growth Score of C, however its Momentum is doing a bit better with a B. Following the exact same course, the stock was allocated also a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for value and momentum investors than growth investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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