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Amdocs (DOX) Up 2.8% Since Earnings Report: Can It Continue?

Highs and Lows Stock Data

It has been about a month since the last earnings report for Amdocs LimitedDOX . Shares have added about 2.8% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Amdocs Beats Q2 Earnings Estimates, Guidance Revised

Amdocs reported relatively healthy second-quarter fiscal 2017 results with modest year-over-year increase in revenues and earnings. GAAP earnings for the quarter improved to $112.6 million or $0.76 a share from $107.7 million or $0.71 per share in the year-earlier quarter.

Non-GAAP earnings were $139.2 million or $0.94 per share compared with $140.2 million or $0.92 in the year-ago quarter. Adjusted earnings for the reported quarter were $0.88 per share, which beat the Zacks Consensus Estimate by $0.01.

Quarterly Performance

Amdocs' total revenue came in at $966.0 million, up 4.3% year over year. The improvement resulted from impressive execution across multiple dimensions of its business and continuous project wins. The top line exceeded the Zacks Consensus Estimate of $962 million. The company's 12-month order backlog at the end of the fiscal second quarter was $3.21 billion, up $30 million from the prior quarter.

Non-GAAP operating income was approximately $166.0 million compared with $158.0 million in the year-ago quarter. Non-GAAP operating margin for the quarter was 17.2%, up 10 basis points year over year.

Segmental Results

Managed Service revenues totaled $511.1 million compared with $501.1 million in the year-earlier quarter. Customer Experience revenues improved to $948.6 million from $902.3 million in the year-ago quarter. Systems Directory revenues were $17.4 million, down from $23.6 million in the prior-year quarter.

Geographically, revenues from North America were $636.3 million, up 8.5% year over year. Revenues from Europe decreased to $115.4 million from $139.2 million in the prior-year quarter while that from the Rest of the World increased to $214.3 million from $200.3 million.

Liquidity

At the quarter end, cash, cash equivalents and short-term interest-bearing investments were $1,149.5 million. Cash flow from operations for the first half of fiscal 2017 was $275.4 million compared with $316.7 million in the year-ago period. The company repurchased $80 million worth of shares during the quarter.

Updated Guidance

For fiscal 2017, Amdocs updated its guidance on favorable growth dynamics and strength in the business model. The company currently expects revenues to be up 3-5% year over year compared with the earlier projection of 1.5-5.5% growth. The company remains on track to deliver non-GAAP earnings per share (EPS) growth of 4.5-8.5%.

For third-quarter fiscal 2017, management expects revenues in the range of $945-$985 million. EPS on a GAAP basis is expected between $0.69 and $0.77 while non-GAAP EPS is projected in the $0.93-$0.99 range.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Amdocs Limited Price and Consensus

Amdocs Limited Price and Consensus | Amdocs Limited Quote

VGM Scores

At this time, Amdocs' stock has a subpar Growth Score of 'D'. Its Momentum lags a bit with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable solely for value investors.

Outlook

Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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