Shares of Verint Systems, an analytics company based in Melville, N.Y., experienced a significant decrease in premarket trading on Thursday following the release of disappointing quarterly results. The company reported adjusted earnings of 48 cents per share for its fiscal second-quarter, which ended on July 31. This figure was accompanied by a 6% decline in revenue, totaling $210.2 million. Unfortunately, these numbers fell short of analysts’ predictions, who were anticipating an adjusted profit of 57 cents per share on revenue of $225.1 million, according to FactSet.
Lowered Revenue Expectations for Full-Year
Furthermore, Verint Systems revised its full-year revenue forecast for fiscal 2024 to $910 million, plus or minus 2%. This is a decrease from the previous guidance in June of $935 million, plus or minus 2%. Even though Wall Street had projected revenue of $934.7 million for the year, Verint decided to readjust its expectations.
Analysts Cut Rating and Price Target
Following the release of the quarterly report, Oppenheimer analysts adjusted their rating on Verint shares from outperform to perform and eliminated their previous target price of $44. They expressed concerns over the deterioration of the company’s growth and emphasized that the reduced guidance heavily affects the fourth-quarter.
Challenges Ahead for Verint
Verint remains optimistic about future prospects such as pent-up demand, next year’s pipeline, and strong customer interest in AI functions and specialized bots. However, analysts at Oppenheimer believe that widespread adoption of these advancements will take time as enterprises focus on building up infrastructure and tooling to support them.
Conclusion
In response to the disappointing quarterly results from Verint Systems, the company’s shares experienced a significant drop in premarket trading. With lower than expected adjusted earnings and a decline in revenue, Verint faces challenges in meeting analyst expectations. Additionally, analysts are wary of the company’s growth prospects and have adjusted their rating and price target accordingly.