We reiterate our long-term Neutral recommendation on
). The company reported mixed financial results for the fourth
quarter of fiscal 2013. While earnings per share were exactly in
line with the Zacks Consensus Estimate, revenues slightly fell
Why the Reiteration?
Amdocs is well positioned in the market as carriers sell
bundled and converged IP-based network solutions to their
subscribers. These services include video, wireless, fixed-mobile
converged and high-speed broadband Internet access solutions.
Amdocs offers integrated customer management systems, which are
essential for carriers to prevent customer churn. Huge
opportunities exist for Amdocs as more telecom companies started
deploying 3G/4G networks.
The company has the largest customer base and the broadest
product line in the industry, including a full suite of
end-to-end solutions for both Business Support Systems (BSS) and
Operations Support Systems (OSS). Business in North America was
comparatively strong. Alongside, the emerging Asia Pacific
markets are witnessing nearly double-digit revenue growth.
Nevertheless, Amdocs is exposed to the global economic
downturn, particularly those events that affect the
telecommunications industry. The macroeconomic scenario is yet to
recover completely. In addition, delay in business transformation
on the part of the carriers may reduce capital spending. Economic
and political uncertainty in Europe may jeopardize the company's
financials, going forward. Furthermore, as the company is
operating globally, it is also exposed to foreign currency
exchange rate risk.
Other Stocks to Consider
Amdocs currently carries a Zacks Rank #2 (Buy). Other stocks
in the same industry which are also doing well include
CoStar Group Inc.
EPAM Systems Inc.
). All three stocks currently have a Zacks Rank #2 (Buy).
COSTAR GRP INC (CSGP): Free Stock Analysis
AMDOCS LTD (DOX): Free Stock Analysis Report
EPAM SYSTEMS (EPAM): Free Stock Analysis
INFOSYS LTD (INFY): Free Stock Analysis
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