Today's Strong And Under The Radar Stock: Verint Systems (VRNT)

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 strong and under the radar 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 $21.6 million.
  • VRNT is making at least a new 3-day high.
  • VRNT has a PE ratio of 125.
  • VRNT is mentioned 1.39 times per day on StockTwits.
  • VRNT has not yet been mentioned on StockTwits today.
  • VRNT is currently in the upper 20% of its 1-year range.
  • VRNT is in the upper 35% of its 20-day range.
  • VRNT is in the upper 45% of its 5-day range.
  • VRNT is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on VRNT:

Verint Systems Inc. provides actionable intelligence solutions and value-added services worldwide. The company operates through three segments: Enterprise Intelligence Solutions, Communications and Cyber Intelligence Solutions, and Video and Situation Intelligence Solutions. VRNT has a PE ratio of 125. 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 399,900 shares per day over the past 30 days. Verint Systems has a market cap of $4.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.03 and a short float of 3.7% with 5.10 days to cover. Shares are up 11.4% year-to-date as of the close of trading on Friday.

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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, good cash flow from operations, expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its 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 1.5%. Since the same quarter one year prior, revenues rose by 21.9%. 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.
  • Net operating cash flow has significantly increased by 63.57% to $103.48 million when compared to the same quarter last year. In addition, VERINT SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -15.51%.
  • The gross profit margin for VERINT SYSTEMS INC is rather high; currently it is at 69.82%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VRNT's net profit margin of 1.47% significantly trails the industry average.
  • Compared to its closing price of one year ago, VRNT's share price has jumped by 53.17%, 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, VERINT SYSTEMS INC reported lower earnings of $0.54 versus $0.99 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $0.54).

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