Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Verint Systems

(

VRNT

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Verint Systems as such a stock due to the following factors:

  • VRNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.3 million.
  • VRNT has traded 262,585 shares today.
  • VRNT traded in a range 316.2% of the normal price range with a price range of $4.00.
  • VRNT traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in VRNT with the Ticky from Trade-Ideas. See the FREE profile for VRNT NOW at Trade-Ideas

More details on VRNT:

Verint Systems Inc. provides Actionable Intelligence solutions and value-added services worldwide. VRNT has a PE ratio of 68.1. Currently there are 6 analysts that rate Verint Systems a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Verint Systems has been 428,300 shares per day over the past 30 days. Verint Systems has a market cap of $3.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.21 and a short float of 3.8% with 4.52 days to cover. Shares are up 0.6% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Verint Systems as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 26.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, VRNT's share price has jumped by 31.20%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • VERINT SYSTEMS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VERINT SYSTEMS INC increased its bottom line by earning $0.99 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($3.43 versus $0.99).
  • VRNT's debt-to-equity ratio of 0.73 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.18 is sturdy.
  • The gross profit margin for VERINT SYSTEMS INC is rather high; currently it is at 68.70%. Regardless of VRNT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VRNT's net profit margin of 3.77% is significantly lower than the industry average.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

null