Amdocs (DOX) AI Stock Analysis

• Market Cap: $9.43B
• Dividend Yield: 2.26%
• Average Volume (3M): 732.83K
• Price to Earnings (P/E): 17.7
• Beta (1Y): 0.53
• Revenue Growth: -4.37%
• EPS Growth: 7.18%
• Country: US
• Employees: 29,058
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Infrastructure
• EPS (TTM): 1.72
• Shares Outstanding: 111,219,000
• 10 Day Avg. Volume: 749,417
• 30 Day Avg. Volume: 732,830
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 2.27
• Enterprise Value/Gross Profit: 6.27
• Enterprise Value/Ebitda: 13.13
• 1Y Price Target: $103.00
• Price Target Upside: 15.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 73 Outperform
• Price Target: $99.00 ▲(11.40% Upside)

Amdocs' overall stock score reflects its solid financial performance and strong earnings call results, which highlight growth in managed services and cloud initiatives. The technical analysis indicates a neutral trend, while the valuation suggests the stock is fairly priced. The company's strategic initiatives in AI and cloud, along with a robust free cash flow, position it well for future growth despite some macroeconomic uncertainties.

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 Limited, through its subsidiaries, provides software and services worldwide. The company designs, develops, operates, implements, supports, and markets open and modular cloud portfolio. It provides CES21, a 5G and cloud-native microservices-based market-leading customer experience suite, that enables service providers to build, deliver, and monetize advanced services; the Commerce and Care suite for order capture, handling, and customer engagement; the Monetization suite for charging, billing, policy, and revenue management; Intelligent Networking suite with a set of modular, flexible, and open service lifecycle management capabilities for network automation journeys; MarketONE, a cloud-native business ecosystem; Digital Brands Suite, a pre-integrated digital business suite for digital telecom brands and small-scale service providers; and eSIM Cloud for service providers. It also offers AI-powered, cloud-native, and home operating systems; data intelligence solutions and applications; media services for media publishers, TV networks, and video streaming and service providers; end-to-end application development and maintenance services; and ongoing services. In addition, the company provides a line of services designed for various stages of a service provider's lifecycle includes design, delivery, quality engineering, operations, systems integration, mobile network services, consulting, and content services; managed services comprising application development, modernization and maintenance, IT and infrastructure services, testing and professional services that are designed to assist customers in the selection, implementation, operation, management, and maintenance of IT systems. It serves to the communications, cable and satellite, entertainment, and media industry service providers, as well as mobile virtual network operators and directory publishers. Amdocs Limited was founded in 1988 and is headquartered in Saint Louis, Missouri.

How the Company Makes Money

Amdocs makes money primarily through the sale of software licenses, managed services, and consulting services to telecommunications and media companies. Its revenue model is built on long-term contracts with large service providers, which include the sale of software solutions and ongoing maintenance and support services. The company also generates revenue from professional services, including project management, implementation, and integration services. Additionally, Amdocs benefits from significant partnerships with leading telecom operators and technology providers, allowing it to expand its market reach and enhance its product offerings. These partnerships, along with its strong focus on innovation and customer satisfaction, contribute significantly to its earnings.

Amdocs Financial Statement Overview

Summary

Amdocs exhibits solid financial health with stable profitability and effective cash flow management. While revenue growth has been underwhelming, cost controls and leverage are well-maintained. The company is in a strong equity position with manageable debt levels. Focus on enhancing revenue growth and optimizing asset utilization could improve performance.

Income Statement

Amdocs' income statement shows a stable performance with a decent gross profit margin and consistent EBIT and EBITDA margins. The TTM data reveals a slight decline in total revenue compared to the previous period, indicating a potential stagnation in revenue growth. However, the company maintains a healthy net profit margin, reflecting efficient cost management. The overall income statement suggests moderate profitability with room for revenue growth improvement.

Balance Sheet

The balance sheet reflects a strong equity position with a good equity ratio, indicating financial stability. The debt-to-equity ratio is reasonable, suggesting manageable leverage levels. However, the ROE has shown some variability, indicating fluctuating returns to shareholders. Overall, the balance sheet is robust, but optimizing asset utilization could enhance performance.

Cash Flow

Amdocs demonstrates strong cash flow management, with a healthy operating cash flow to net income ratio, indicating efficient operational performance. The free cash flow remains positive, albeit with a slight decrease in growth rate, which could impact future investment capabilities. However, the company appears to effectively manage its cash flows, maintaining flexibility for strategic initiatives.

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

Amdocs Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 88.87
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOX, the sentiment is Positive. The current price of 88.87 is above the 20-day moving average (MA) of 87.49, below the 50-day MA of 89.94, and above the 200-day MA of 87.35, indicating a neutral trend. The MACD of -1.19 indicates Positive momentum. The RSI at 53.37 is Neutral, neither overbought nor oversold. The STOCH value of 38.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DOX.

Amdocs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOX	73 Outperform	$9.43B	17.75	15.83%	2.26%	-4.37%	7.18%
AKAM	73 Outperform	$10.89B	25.22	9.82%	―	3.51%	-27.28%
Sector *	69 Neutral	¥233.77B	14.28	7.64%	2.58%	9.19%	5.32%
KVYO	67 Neutral	$8.47B	―	-6.42%	―	33.17%	82.85%
DBX	66 Neutral	$7.36B	17.42	-60.11%	―	0.79%	0.59%
RBRK	58 Neutral	$16.94B	―	218.28%	―	43.89%	49.74%
SAIL	46 Neutral	$10.85B	―	-11.15%	―	23.16%	-9.81%