Amdocs (DOX) AI Stock Analysis

• Market Cap: $9.62B
• Dividend Yield: 2.31%
• Average Volume (3M): 805.54K
• Price to Earnings (P/E): 17.6
• Beta (1Y): 0.51
• Revenue Growth: -6.76%
• EPS Growth: 13.90%
• Country: US
• Employees: 29,058
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 1.72
• Shares Outstanding: 111,219,000
• 10 Day Avg. Volume: 812,580
• 30 Day Avg. Volume: 805,543
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 2.26
• Enterprise Value/Gross Profit: 6.12
• Enterprise Value/Ebitda: 12.30
• 1Y Price Target: $105.33
• Price Target Upside: 21.71% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 74 Outperform
• Price Target: $98.00 ▲(13.24% Upside)

Amdocs' strong financial performance and positive earnings call are the most significant factors contributing to its score. While technical analysis shows neutral signals, the company's reasonable valuation and strategic advancements in cloud services and AI support a positive outlook. Challenges in revenue growth and macroeconomic uncertainties are noted but do not overshadow the company's strengths.

Positive Factors

Cloud Growth

Cloud initiatives continue to generate most of the growth, with cloud accounting for over 25% of revenues and growing at a double-digit rate.

Financial Performance

Operating margin of 21.2% increased by 310 basis points year-over-year, driven by the phasing out of non-core businesses and operating efficiencies.

Revenue Visibility

Backlog increased by $80 million quarter-over-quarter and 3.5% year-over-year on a pro forma constant currency basis, providing nearly 90% visibility for next year's revenues.

Negative Factors

Industry Challenges

The company noted continued industry spending challenges, contributing to a challenging core underlying growth.

Macro Environment

There has been no significant shift in the sluggish business trends, and the company is still experiencing an unfavorable macro environment.

Revenue Headwind

The business will face lower growth and a $600 million revenue headwind due to the discontinuation of low-margin businesses.

Amdocs Business Overview & Revenue Model

Company Description

Amdocs (DOX) is a leading provider of software and services for communications and media companies. With a focus on enhancing customer experience, Amdocs offers solutions that span billing, customer relationship management (CRM), and operational support systems (OSS). The company's offerings enable service providers to streamline operations, drive innovation, and deliver personalized services across various channels, including mobile, digital, and cloud environments. Amdocs serves a diverse range of clients, including telecommunications operators, cable and satellite companies, and digital service providers, operating in sectors that are increasingly reliant on technology to meet consumer demands.

How the Company Makes Money

Amdocs generates revenue primarily through the sale of software licenses, maintenance and support services, and consulting and systems integration services. The company’s revenue model includes both recurring revenues from long-term contracts and project-based revenues from specific implementations. Key revenue streams come from its customer experience systems, billing solutions, and managed services. Amdocs has established significant partnerships with major telecommunications and media companies, which contribute to its earnings through long-term engagements and collaborations. Additionally, the company benefits from a strong demand for digital transformation services, as clients increasingly seek to modernize their operations and enhance customer engagement through advanced technology solutions.

Amdocs Financial Statement Overview

Summary

Amdocs presents a strong financial profile with solid profitability and a stable balance sheet. While the company faces challenges in revenue growth, its efficient cash flow management and low leverage provide a cushion against market fluctuations. Continued focus on revenue growth and cash flow optimization will be key to sustaining its financial health.

Income Statement

Amdocs shows strong profitability with a consistent gross profit margin around 35-37% and a net profit margin improving to 11.96% in TTM. However, recent revenue growth has turned negative at -2.22% in TTM, indicating potential challenges in maintaining growth momentum.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.24, indicating prudent financial leverage. Return on equity is robust at 16.01% in TTM, reflecting efficient use of equity capital. The equity ratio remains stable, supporting financial stability.

Cash Flow

Amdocs demonstrates solid cash flow management with a free cash flow to net income ratio of 0.86 in TTM, indicating strong cash conversion. However, the operating cash flow to net income ratio has decreased, suggesting potential pressure on operational cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.65B	5.00B	4.89B	4.58B	4.29B	4.17B
Gross Profit	1.71B	1.76B	1.73B	1.62B	1.48B	1.41B
EBITDA	852.98M	819.03M	855.15M	889.85M	1.04B	792.16M
Net Income	554.82M	493.20M	540.71M	549.50M	688.37M	497.84M
Balance Sheet
Total Assets	6.33B	6.39B	6.43B	6.39B	6.51B	6.34B
Cash, Cash Equivalents and Short-Term Investments	342.47M	514.33M	742.53M	817.98M	965.59M	983.94M
Total Debt	838.64M	789.74M	807.31M	826.83M	881.17M	1.03B
Total Liabilities	2.79B	2.89B	2.86B	2.83B	2.88B	2.68B
Stockholders Equity	3.50B	3.46B	3.52B	3.52B	3.59B	3.62B
Cash Flow
Free Cash Flow	638.63M	618.93M	698.27M	529.50M	715.37M	452.63M
Operating Cash Flow	737.18M	724.43M	822.63M	756.72M	925.81M	658.14M
Investing Cash Flow	-28.19M	-127.41M	-224.50M	-262.50M	-329.00M	-461.73M
Financing Cash Flow	-759.66M	-771.02M	-651.43M	-629.90M	-870.93M	315.14M

Amdocs Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 86.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOX, the sentiment is Negative. The current price of 86.54 is below the 20-day moving average (MA) of 86.83, below the 50-day MA of 88.71, and below the 200-day MA of 87.33, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 48.38 is Neutral, neither overbought nor oversold. The STOCH value of 36.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DOX.

Amdocs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOX	74 Outperform	$9.62B	17.62	15.75%	2.31%	-6.76%	13.90%
AKAM	71 Outperform	$11.03B	27.28	9.21%	―	3.98%	-31.18%
DBX	68 Neutral	$7.39B	17.28	-60.11%	―	-0.04%	-5.07%
KVYO	65 Neutral	$9.47B	―	-6.42%	―	33.17%	82.85%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
RBRK	49 Neutral	$16.48B	―	218.28%	―	43.89%	49.74%
SAIL	49 Neutral	$11.19B	―	-11.15%	―	23.05%	-23.69%