Zacks Investment Research upgraded
) by a notch to a Zacks Rank #2 (Buy) on July 1, 2014. The shares
of this leading provider of customer relationship management (CRM)
and billing software to communications service providers have
jumped more than 13% so far in the year.
Amdocs' business potential in the U.S. has gained greater
visibility following the stabilization of its Business Support
Systems (BSS) business with its major customer
) and the renewal of long-term contracts with several leading
telecom and cable TV operators. The company has also won
significant managed service contracts in Europe despite the
economic volatility therein. We believe that the long-term
fundamentals of the company are intriguing given the transition of
the telecom industry toward converged IP solutions.
Moreover, Amdocs is well positioned in the market where large
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. With the network becoming increasingly complex, carriers
have started spending more on customer care and billing software.
Amdocs offers integrated customer management systems which help
carriers counter customer churn.
Amdocs 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). The company's total order backlog stood at
nearly $2.94 billion at the end of the fiscal second quarter.
In the second quarter of fiscal 2014, the company reported
earnings per share of 76 cents surpassing the Zacks Consensus
Estimate of 73 cents. Earnings were also up 7.4% from the
prior-year quarter. Total revenue came in at $896.9 million, up
7.7% year over year, exceeding the Zacks Consensus Estimate of $892
Other Stocks Worth Considering
Other stocks also worth considering in the telecommunication
Science Applications International Corporation
). Both the stocks carry the same Zacks Rank as Amdocs.
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