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Nice Systems ( NICE ) gouged Big Data cybersecurity rival Verint Systems ‘ ( VRNT ) market share last year, with Nice’s share rising 2% as Verint’s enterprise business lost 12%, Deutsche Bank analyst Nandan Amladi wrote Wednesday. Amladi and Credit Suisse analyst Michael Nemeroff both downgraded Verint stock on Wednesday, after the company late Tuesday posted Q4 and 2016 results that missed expectations and gave 2017 guidance that also lagged views. Intraday on the stock market today , Verint stock plunged 12%, near 31. Nice stock was up a fraction in early afternoon trading Wednesday, near 65. For its fiscal Q4 ended Jan. 31, Verint reported $281.8 million in non-GAAP sales and 90 cents earnings per share ex items, down a respective 10% and 15% year over year. Both measures missed the consensus of seven analysts polled by Thomson Reuters for $318 million and $1.17. On the conference call Tuesday, Verint blamed macroeconomic weakness in emerging markets for the miss. For the year, non-GAAP sales fell 2% to $1.14 billion and EPS ex items fell 9% to $3.04. The consensus modeled $1.17 billion and $3.30. Amladi downgraded Verint stock to neutral from hold and cut his price target to 35 from 50. The emerging markets will continue slowing, and enterprise sales won’t be as strong as Verint suggests, he wrote in a research report. Late Tuesday, Verint guided to a 10%-15% decline in current-quarter security sales, slightly offset by mid- to high-single-digit enterprise sales growth. Fiscal 2017 sales, EPS and margins are expected to be flat. Amladi noted Verint is 50% exposed to the weak emerging-market segment, and that the company’s cyber intelligence head departed in February. Verint hasn’t seen a “blockbuster” deal since a $100 million accord in 2014, and current seven-figure deals are on the government side rather than enterprise, he said. Credit Suisse’s Nemeroff says investors could overlook Verint’s poor revenue guide if the company cut costs to leverage earnings, but adding that such a move “is not their strategy at this time.” Excluding a $150 million, two-year share buyback program — about 7% of Verint’s market cap — growth will stagnate in 2017 for the second year running, Nemeroff wrote in a report. He cut his price target to 29 from 45 and downgraded Verint stock to underperform from neutral. William Blair analyst Jonathan Ho, on the other hand, sees Verint recovering from its poor Q4, the third time in the past four quarters in which Verint either missed expectations or guided down. Investors should take advantage of the cheap valuation, he wrote in a report. “We believe the business should revert to normal,” he wrote. “However, we concede that there is a significant amount of macro uncertainty based on factors that could affect the timing of a rebound that are outside the company’s control.” Ho reiterated an outperform rating on Verint stock. Image provided by Shutterstock . Scalper1 News
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