On Friday, Needham analysts maintained a Buy rating and a $40.00 price target for Verint Systems (NASDAQ:VRNT), expressing a strong conviction in the company's prospects for 2025. Currently trading at $25.02, InvestingPro analysis suggests the stock is significantly undervalued, aligning with Needham's bullish outlook. Verint Systems, recognized for its analytics and engagement solutions, has been selected as Needham's top pick for the year.
The endorsement comes with a positive outlook on several fronts. Analysts at Needham anticipate an upswing in contact center spending, which is expected to recover from a post-COVID boom period that lasted until 2022. This anticipated rebound is seen as a key driver for Verint's performance, building on its current revenue of $920.75 million and healthy gross profit margin of 71.5%.
Another factor contributing to Needham's confidence in Verint is its solid footing in the Hybrid Cloud contact center space. The firm's offerings cater to a significant segment of the enterprise market that prefers this model, positioning Verint favorably in the industry.
Furthermore, Needham forecasts that Verint will successfully counterbalance any potential downturns in revenue from seat-based Workforce Optimization (WFO) with its growth in AI Bot applications. This projection challenges the bearish sentiment regarding near-term declines in contact center seats.
The analysts also underscore the combination of steady Long-Duration Deferred Revenue (LDD ARR) growth, substantial share buybacks, and increasing Free Cash Flow (FCF) as factors that will likely draw new investors to Verint Systems in 2025.
Needham's addition of Verint Systems to its Conviction List is a significant mark of confidence, suggesting that the firm's strategic position and financial maneuvers are well-aligned for growth in the coming year.
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