We reiterate our Neutral recommendation on
). A proactive stance on advancing the company's core competency
areas and incipient buy-back activities are likely to partially
neutralize the effects of the weak economic condition and ominous
competition prevailing in the industry.
Acxiom has achieved a formidable position in the field of
marketing services and technology. The company's diversified
product offerings such as AbiliTec Digital, InfoBase-X, Customer
Data Integration (CDI) services and customer recognition software
provide Acxiom a high competitive edge in this industry which
includes big players such as
Fair Issac Corp.
Camelot Information Systems Inc.
CoStar Group Inc.
One aspect which has forever been an integral part of Acxiom's
total approach is its desire to return optimum value to its
shareholders through buy back activities. The company has already
repurchased 6.1 million shares at nearly $71 million till now in
its fiscal year 2012. In addition, Acxiom has also recently
declared that it has raised the amount pertaining to its share
repurchase plan to a total of $150 million. Hence, on the basis of
the company's existing trends we can expect similar moves on the
part of it in the upcoming quarters as well.
The company has taken several initiatives for emphasizing its
core competency areas more with heavy investments and product
launches which are perceived to be the growth drivers in the coming
quarters for Acxiom. The company's recent prestigious contract wins
from Horizon Healthcare Services Inc. and Mindshare are also
expected to positively influence Acxiom's upcoming financial
Although Acxiom's intent and advances towards meeting long-term
goals are remarkable, we are, however, concerned about the clouded
fiscal scenario prevalent in the world today which may negatively
affect the company. Acxiom is very much vulnerable to several
factors such as adverse foreign exchange movements and inflationary
pressures which can be detrimental to the company's earnings and
We recently observed quite a few changes in the company's
top-level management. The first of these changes was the
appointment of Scott Howe as the new CEO and President. Second,
Warren Jenson was also appointed as an Executive Vice President in
the company. Such management shifts may have a pervasive impact on
Acxiom's overall functioning, goals and investor perception.
Moreover, the company's increasing focus on its core areas required
high investments, due to which management declined its EPS
projections for the upcoming fiscal year 2013 to a range of $0.55 -
Hence, until the situation ameliorates and a brighter picture
appears on the scene, we consider it wise to maintain a sideline
stance on Acxiom. In the short run, we have a Zacks #3 Rank on the
stock which translates into a short-term 'Hold' rating.
ACXIOM CORP (ACXM): Free Stock Analysis Report
CAMELOT INF-ADS (CIS): Free Stock Analysis
COSTAR GRP INC (CSGP): Free Stock Analysis
FAIR ISAAC INC (FICO): Free Stock Analysis
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