These Two Analysts Remain Bullish On Verint Following Its Q3 Print

• Shares of Verint Systems Inc. VRNT plunged more than 10 percent on Thursday after the company's third quarter print fell short of Wall Street's expectations.
• Verint said it earned $0.78 per share in the third quarter on revenue of $284.1 million, short of the $0.79 per share and $299 million analysts were expecting.
• Despite a top and bottom miss and caution guidance, analysts at Oppenheimer and Imperial Capital both maintained Outperform ratings.

Shares of Verint have now lost more than 30 percent over the past year.

Despite a poor third quarter, two Wall Street analysts remain confident in the company's outlook.

Oppenheimer: Verint Continues To Win ‘Large' Contracts

Shaul Eyal of Oppenheimer commented in a note that Verint was "penalized" in its third quarter print due to unfavorable foreign exchange rates and "elongated" purchase approval processes.

Eyal noted that even though Verint lowered its full year fiscal 2015 guidance and provided initial fiscal 2016 guidance in which both revenue and earnings per share midpoints were below the prior consensus, there are several "positives." The analyst highlighted the fact that management continues to win "large" contracts, including a $20 million Enterprise order. In addition, the company maintained its ability to expand operating margins, and boasts a "solid" pipeline.

Eyal added that over the long term, Verint remains "well positioned" within the Actionable Intelligence/Big Data/Cyber-Security universe, and that its current headwinds will "prove transitory."

Shares remain Outperform rated with a price target lowered to $60 from a previous $65.

Imperial Capital: Larger Transactions To Continue

Jeff Kessler of Imperial Capital commented in a note that Verint should make use of some of its $367 million in cash to pursue more "strategic" acquisitions, increase its sales talent, and consider share buyback opportunities. However, macro-related "uncertainties" makes it difficult to "project the best use of cash" in the near term.

Kessler also noted that Verint's revenue outlook for fiscal 2016 suffered due to weakening exchange rates. In addition, global macro concerns could also "influence" customer buying decisions. However, the analyst noted that the "enormity" of the cyber-related decisions are causing a "longer, more holistic consideration period" compared to the past. As such, decisions are being "kicked upstairs" and taking more time to be considered.

Finally, Kessler stated that he expects a trend of "larger" transactions, especially in surveillance analytics to continue with a "lumpier," but "potentially larger" revenue profile.

Shares remain Outperform rated with a price target lowered to $55 from a previous $60.