Even though billing and order management solutions firm
(NYSE:DOX) announced on Wednesday that it had signed a deal with leading Russian telecommunication service provider Vimpel-Communications (NYSE: VIP), it hasn't succeeded in erasing the effect of having its recommendation lowered by
Analysts at the investment house cut their recommendation for Amdocs from a Strong Buy to an Outperform, and slashed its price target 20% from $80 to $65. The analysts believe that Amdocs will meet its second quarter forecasts, with revenues of $403 million and a profit per share of 32 cents. But forecasts for the rest of the year are lower, together with an expected drop in the firm's revenues.
This week alone the Amdocs shares have fallen 19.3% to $39.2 per share, reflecting a market cap of $8.9 billion for the firm. The share is also attracting a turnover seven times greater than average.
Meanwhile, announcing the Amdocs-Vimpel deal in which the Russian service provider will utilize Amdocs' products for its end-to-end billing and Customer Relationship Management (CRM) in its cellular networks and GPRS, hasn't help the share price rebound. The financial scope of the deal has not been disclosed.
"Vimpel-Communications is one of the largest service providers in Russia and I hope this deal will help Amdocs increase its penetration of the Russian market, where we see great potential," was all Amdocs European President Simon Cassif had to say.