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What's in Store for Verint Systems (VRNT) in Q3 Earnings?

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Verint Systems (VRNT - Free Report) is set to report third-quarter fiscal 2019 results on Dec 5.

The company’s earnings beat the Zack Consensus Estimate in all the trailing four quarters, delivering average positive surprise of 11.9%.

In the last reported quarter, Verint Systems posted non-GAAP earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 63 cents per share and increased 24.6% from the year-ago quarter.

Non-GAAP revenues of $308.5 million increased 10.9% from the year-ago quarter and beat the consensus mark of $298 million.

The Zacks Consensus Estimate for third-quarter fiscal 2019 revenues is currently pegged at $305.5 million while that for earnings stands at 71 cents per share.

Let’s see how things are shaping up prior to this announcement.

Verint Systems Inc. Price and EPS Surprise

Verint Systems Inc. Price and EPS Surprise | Verint Systems Inc. Quote

Key Factors to Consider

Verint Systems’ innovative artificial intelligence (AI) and automation technologies are helping it to differentiate its services and deliver better customer experience across its customer engagement and cyber intelligence segments.

Additionally, the company’s ability to anticipate new market trends and bring solutions to address the same is helping Verint Systems win new customer orders and strengthen existing customer relationships.

Notably, in second quarter fiscal 2019, Verint Systems won approximately $21 million worth of orders in customer engagement segment and approximately $70 million worth of orders in the cyber intelligence segment.

Flexible cloud options (on-premises and hybrid) to deploy Verint Systems’ software solutions and open application program interface (API) architecture, which can easily integrate the company’s solutions into existing environments is helping it to wins orders in customer engagement segment.

Notably, the company’s open API can be easily integrated across a wide range of channels, including IVR, Microsoft’s (MSFT - Free Report) Skype, Web, Live Chat, Mobile, SMS, Amazon Alexa and Facebook (FB - Free Report) Messenger among others.

Moreover, increase in security threats and need for advanced automation and predictive intelligence capabilities are expected to boost demand for data mining software in the to-be-reported quarter. Notably, in the last reported quarter, revenues from cyber intelligence segment increased 11.4% to $105.5 million.

We believe that growing demand for advanced analytical solutions and data protection software across companies and geographies is likely to drive Verint Systems’ top line in third quarter fiscal 2019.

However, heavy investments in research and development to deliver innovative actionable intelligence solutions may hurt margins in the near term.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

Verint Systems has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stock to Consider

Here is a stock that you may want to consider as our model shows that it has the right combination of elements to post an earnings beat in its upcoming release:

Lululemon athletica (LULU - Free Report) has an Earnings ESP of +1.55% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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