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Verint's Foresee Acquisition to Strengthen VoC Portfolio

Zacks Equity Research

Verint Systems’ VRNT growth trajectory has been driven by strategic buyouts over the years. The company continues to have a healthy appetite, which is reflected by its recent announcement to acquire cloud voice of the customer (VoC) vendor, Foresee.

The latest acquisition is expected to strengthen Verint’s omnichannel VoC portfolio with the addition of ForeSee’s causal modeling, predictive analytics and benchmarking features. The combined solution will strengthen enterprises’ ability to gauge customer experience and take steps to improve.

Notably, Verint’s customer engagement portfolio supports more than 3 billion cloud interactions across its customer base on an annual basis. This has been driving Customer Engagement revenues (65% of total revenues), which increased 8.7% year over year to $197.5 million in the last reported quarter.

What Awaits Verint in 2019?

Notably, Verint has beaten the Zacks Consensus Estimate for earnings in the trailing four quarters, with positive average surprise of 12.8%.

However, robust performance has not been sufficient to drive shares, which have underperformed the industry on a year-to-date basis. Verint’s shares returned 7.1% compared with industry’s rally of 13.5%.

 

Verint has been hurt by stiff competition in the Customer Experience (CX) market from the likes of SVMK SVMK and SAP SAP. Moreover, the company’s highly leveraged balance sheet has been a major concern for investors.

Nevertheless, Verint’s expanding Customer Engagement portfolio and strong Cyber Intelligence revenues are expected to help the shares rebound in 2019. The company offers a broad range of solutions catering to enterprises across contact centers, self-service, back office, customer experience, marketing, compliance and IT.

Strong demand for solutions that help customers capture and analyze massive amounts of data and derive actionable insights is a key catalyst for Verint. Moreover, growing demand for data protection software is a major driver.

Further, Verint’s strategy to infuse automation across its Customer Engagement portfolio is likely to expand customer base in 2019.

Zacks Rank & Other Key Pick

Verint currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cadence Design Systems CDNS is another stock in the same industry that sports the same rank as of Verint.

Expected long term earnings growth for Cadence is 12%.

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