Verint Systems (VRNT:NAS) Fundamental Valuation Report



Fundamental Valuation Report

Verint Systems(VRNT:NAS)

Technology:Software-Application

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$59.88 (USD) 13/05/2019

Weighted Valuation
$62.34 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 4.1%

Valuation Models Analyst Consensus: $65.00 (USD)
(in order of importance) Discounted Cash Flow: $63.92 (USD)
Adjusted Book Value: $51.19 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (VRNT:NAS USD)

Price 59.88
Range 59.70 – 60.67
52 week 40.51 – 63.81
Open 60.32
Vol / Avg. 417072/533592
Mkt cap 3.94B
P/E 59.88
Div/yield 0.00/0.00
EPS 1.00
Shares 65.77M
Beta 1.18

Company Description

Verint Systems is an enterprise software company operating in two segments, customer engagement and cyber intelligence solutions. Verint Systems helps customers capture and analyze large volumes of disparate data such as voice, video, and unstructured text, through data processing, data capture, and data visualization. The customer engagement segment provides workforce engagement management services, in addition to compliance and fraud software. These offerings are deployed on-premises, in the public cloud, or through a perpetual license model. This segment encompasses the majority of revenue for the firm. The cyber intelligence segment produces data mining software to prevent terror, crime, and cyber threats.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for VRNT:NAS

Using a discounted cash flow model we generated an intrinsic value of $63.92 (USD) for VRNT:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

VRNT:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $63.92 1% 5% 1% 5%
WACC (or Ke) 8.85 $79.56 $52.84
Terminal Growth Rate 3.00 $53.96 $77.98
Tax Rate 0.10 $68.23 $59.60
Cash Flow 386,124,216 $59.80 $68.03
Capital Expenditures -28,631,000 $63.65 $64.19
Long Term Debt 739,914,000 $64.48 $63.35

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $86.27 (USD) for VRNT:NAS. We also generated a valuation of $73.66 (USD) using other metrics and comparables.
The comparable companies were Rapid7 (RPD:NAS), Mantech Intl (MANT:NAS), Nuance Communications (NUAN:NAS), Qualys (QLYS:NAS) and Blackbaud (BLKB:NAS).

Company VRNT:NAS End Date Value
Earnings/Share $1.00 (USD)
Book Value/Share $19.12 (USD)
Sales/Share $18.56 (USD)
Cash Flow/Share $3.25 (USD)
EBITDA/Share $3.08 (USD)
Price Based on Comps Adjustment Factor (%)
$80.94 (USD) 0.0
$209.42 (USD) 0.0
$118.52 (USD) -54.1
$60.01 (USD) -67.2
$97.96 (USD) -26.7
VRNT:NAS Ratios Used Average Values RPD:NAS MANT:NAS NUAN:NAS QLYS:NAS BLKB:NAS
60.39 PE Ratio 80.94 0.00 30.09 0.00 65.88 146.83
3.16 PB Ratio 10.95 29.99 1.76 2.47 9.87 10.66
3.25 PS Ratio 6.38 10.34 1.26 2.33 13.56 4.43
18.59 PCF Ratio 100.93 416.17 26.45 10.67 30.14 21.21
21.22 EV to EBITDA 31.81 0.00 14.94 38.68 38.40 35.21

Multiples

Using a multiples approach we generated a valuation of  $73.35 (USD) for VRNT:NAS

Company VRNT:NAS End Date Value
Earnings/Share $1.00 (USD)
Book Value/Share $19.12 (USD)
Sales/Share $18.56 (USD)
Cash Flow/Share $3.25 (USD)
EBITDA/Share $3.08 (USD)
Price Based on Comps Adjustment Factor
$160.47 (USD) 0
$47.96 (USD) 0
$44.43 (USD) 0
$49.44 (USD) 0
$64.45 (USD) 0
Ratios Ratio Average
PE Ratio 160.47
PB Ratio 2.51
PS Ratio 2.39
PCF Ratio 15.22
EV to EBITDA 20.93

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  VRNT:NAS for the last 9 years was  2.68

We ran the Adjusted Book Value for  VRNT:NAS and generated a book value of  $19.12 (USD)
By multiplying these we get an adjusted valuation of  $51.19 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for VRNT:NAS. The 2 analysts have a concensus valuation for VRNT:NAS for 2020 of $65.00 (USD).

VRNT:NAS Verint Systems

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 1 0 4.3333 Outperform 2019-5-10

Current Price: 59.88 USD

Analyst Consensus
USD Millions 2020 2021
Mean EPS 3.60 4.03
# EPS Analysts 3 3
Mean Revenue 1,408.60 1,476.10
# Revenue Analysts 3 3
Mean Target Price 65.00
Mean Cash Flow 4.21 3.93
Mean EBITDA 325.00 340.00
Mean Net Income 241.60 275.90
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate 11.98
Mean Capital Expenditure 27.00 27.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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