Amdocs’s Growth Potential and Strong Revenue Visibility Support Buy Rating

Analyst Tal Liani of Bank of America Securities reiterated a Buy rating on Amdocs (DOX – Research Report), retaining the price target of $100.00.

Tal Liani has given his Buy rating due to a combination of factors that highlight Amdocs’s potential for growth. The company’s operating margin has improved significantly, driven by the phasing out of non-core businesses and enhanced operational efficiencies. Although Amdocs has experienced slow growth due to spending pressures from Service Providers, the outlook is promising with Cloud services now representing over 25% of revenues and showing double-digit growth. Additionally, key Service Providers and Cable MSOs have substantial projects in the pipeline, which further supports future growth prospects.
Another reason for the Buy rating is the strong revenue visibility and pipeline strength that Amdocs possesses. The company’s backlog has increased both quarterly and yearly on a constant currency basis, providing nearly 90% revenue visibility for the coming year. The Cloud segment is a major contributor to these opportunities. Moreover, the company’s expectation of sustained high operating margins and potential future growth drivers, such as GenAI and data management, add to its positive outlook. As a result, Liani maintains a price objective of $100, reflecting confidence in Amdocs’s ongoing growth trajectory.