| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 3/6 |
| Past Performance | 2/6 |
| Financial Health | 5/6 |
| Dividends | 5/6 |
DOX Stock Overview
Amdocs Limited, through its subsidiaries, provides software and services worldwide.
Rewards
Trading at good value vs. peer average Price-To-Earnings ratio
Risk Analysis
No risks detected for DOX from our risk checks.
Amdocs Limited Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$79.37 |
| 52 Week High | US$90.77 |
| 52 Week Low | US$68.33 |
| Beta | 0.68 |
| 1 Month Change | -9.76% |
| 3 Month Change | -6.49% |
| 1 Year Change | 3.29% |
| 3 Year Change | 20.73% |
| 5 Year Change | 23.40% |
| Change since IPO | 466.93% |
Recent News & Updates
Amdocs: Sticky Business Model Enables Growth, Share Buybacks
IT provider Amdocs has a sticky business model that is growing revenue at ~10% rate and throwing off significant free-cash-flow. Since the company has a meaningful stock buyback plan, EPS has the potential to grow faster than revenue - perhaps to the mid-teens. The balance sheet is solid, so DOX's strong backlog and cash-flow profile enables it to supplement organic growth with strategic M&A. The latest deal to be announced is for MYCOM OSI, a company that will expand DOX's cloud-based networking & service assurance offerings. St. Louis, Missouri-based Amdocs (DOX), an IT provider of 5G and cloud-based networking, customer care, engagement, assurance and billing services, is outperforming the broad market this year (+18.5% YTD) and has a total return of 59% since my initial BUY rating coverage started on Seeking Alpha back in September of 2020 (see Amdocs: Time To Play Catchup). The company is generating strong free-cash-flow and has a meaningful share buyback program that is significantly reducing the outstanding share-count. The Q3 earnings report released a couple of weeks ago was bullish: record revenue, a strong backlog, and slightly better forward guidance. DOX has a strong balance sheet, and its stable and sticky business model enables it to bolster organic growth with opportunistic and strategic M&A. The company should be able to keep growing revenue at ~10% annually, with earnings growing a bit faster than that due to share-count reduction. I reiterate my BUY rating on DOX based on its rather defensive nature, strong profitability & free-cash-flow profile, steady-as-she-goes growth, and rational valuation. Investment Thesis 5G networking and cloud-based IT services company Amdocs provides customer care, engagement, and billing support that are the kind of sticky services that its customers (companies like AT&T, T-Mobile, Comcast, etc.) are very hesitant to switch due to the potential for a messy migration, customer disappointment, and increased cost. As a result, DOX has stable revenue which generates significant free-cash-flow. A strong balance sheet and its free-cash-flow profile enables the company to reward shareholders while using M&A to supplement organic growth. Q3 Earnings DOX released its Q3 EPS report on August 3rd, and it was a beat. I say a "beat" because, despite a $7 million foreign exchange headwind, revenue was a record (+8.8% yoy and an acceleration of the 3.9% in the prior year) and EPS came in toward the high-end of guidance: Amdocs Note that, in constant currency terms, it was DOX's fourth straight quarter of 10% yoy revenue growth due to record North America results ($788 million or 68% of total revenue). Normalized free-cash-flow during the quarter was $144 million - which equates to $1.17/share based on the 123.153 million fully-diluted shares outstanding at quarter's end. Margin was flat sequentially but met the mid-point of guidance despite the FX headwind. On the Q3 conference call, Amdocs CEO Shuky Sheffer reported on recent business developments: Q3 was also another quarter of robust sales momentum. We strengthen relationship with large and long-standing customers like T-Mobile and AT&T's Cricket Wireless, we are happy to say that we expanded our managed services engagement for an additional five years, as Tamar will touch on later. Additionally, we further grew our footprint with other major operators including Vodafone Germany, which has selected Amdocs for follow-on digital transformation projects. Sheffer also said DOX integrated more than 27 million customers for Excel in Indonesia as part of a multi-year managed digital transformation project. The project will enable Excel to launch innovative digital services and enhance their customer experiences. Amdocs is also reaching millions of Brazilian subscribers in all cities serviced by Telefonica Vivo. Share Buybacks During the quarter, DOX repurchased $100 million worth of shares while paying out dividends of $49 million: Amdocs Now, typically I don't like to see such an over-emphasis on share buybacks. However, to illustrate my point that Amdocs actually has a "meaningful" share buyback program that outpaces employee stock compensation (somewhat rare these days ...), note that the outstanding share-count in my first article on DOX in September of 2020 (Q3 FY2020) was 133,593,000. At the end of the recent Q3 report (two years later), the outstanding fully-diluted share-count was 123,153,000, or down 10,440,00 shares, or -7.8%. That is a meaningful reduction in shares that has - along with strategic M&A and organic growth - worked to increase EPS from $0.90/share in Q3 FY2020 to (non-GAAP) $1.27/share in Q3 FY2022. Going Forward DOX reported a 12-month backlog that was a record $3.95 billion - that's +10% yoy, +$60 million qoq, and gives investors relatively high visibility into the future. The acquisition of MYCOM OSI was announced in May for $188 million in cash and is expected to close during Q1 FY2023. MYCOM OSI is a privately-owned business headquartered in London but also has offices in the US, France, the UAE, India, and Singapore. MYCOM OSI was the first service assurance vendor to offer its applications via a SaaS-based subscription model over the public cloud. Although the acquisition is not expected to have a material effect on earnings over the next couple of year, DOX appears to be playing the long-game here by expanding its end-to-end network and assurance solutions while opening the door to new customers for which it can then offer its other services: Amdocs
An Intrinsic Calculation For Amdocs Limited (NASDAQ:DOX) Suggests It's 49% Undervalued
Does the August share price for Amdocs Limited ( NASDAQ:DOX ) reflect what it's really worth? Today, we will estimate...
Shareholder Returns
| DOX | US IT | US Market | |
|---|---|---|---|
| 7D | -3.0% | -5.9% | -5.2% |
| 1Y | 3.3% | -39.2% | -23.1% |
Return vs Industry: DOX exceeded the US IT industry which returned -39.2% over the past year.
Return vs Market: DOX exceeded the US Market which returned -23.1% over the past year.
Price Volatility
| DOX volatility | |
|---|---|
| DOX Average Weekly Movement | 2.5% |
| IT Industry Average Movement | 8.0% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.9% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: DOX is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.
Volatility Over Time: DOX's weekly volatility (2%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1988 | 27,176 | Shuky Sheffer | https://www.amdocs.com |
Amdocs Limited, through its subsidiaries, provides software and services worldwide. The company designs, develops, operates, implements, supports, and markets open and modular cloud portfolio. It provides CES21, a 5G and cloud-native microservices-based market-leading customer experience suite, that enables service providers to build, deliver, and monetize advanced services; the Commerce and Care suite for order capture, handling, and customer engagement; the Monetization suite for charging, billing, policy, and revenue management; Intelligent Networking suite with a set of modular, flexible, and open service lifecycle management capabilities for network automation journeys; MarketONE, a cloud-native business ecosystem; Digital Brands Suite, a pre-integrated digital business suite for digital telecom brands and small-scale service providers; and eSIM Cloud for service providers.
Amdocs Limited Fundamentals Summary
| DOX fundamental statistics | |
|---|---|
| Market Cap | US$9.68b |
| Earnings (TTM) | US$544.09m |
| Revenue (TTM) | US$4.50b |
17.8x
P/E Ratio2.2x
P/S RatioIs DOX overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| DOX income statement (TTM) | |
|---|---|
| Revenue | US$4.50b |
| Cost of Revenue | US$2.91b |
| Gross Profit | US$1.58b |
| Other Expenses | US$1.04b |
| Earnings | US$544.09m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 4.46 |
| Gross Margin | 35.22% |
| Net Profit Margin | 12.10% |
| Debt/Equity Ratio | 18.1% |
How did DOX perform over the long term?
See historical performance and comparisonDividends
2.0%
Current Dividend Yield34%
Payout RatioDoes DOX pay a reliable dividends?
See DOX dividend history and benchmarks| Amdocs dividend dates | |
|---|---|
| Ex Dividend Date | Sep 29 2022 |
| Dividend Pay Date | Oct 28 2022 |
| Days until Ex dividend | 4 days |
| Days until Dividend pay date | 33 days |
Does DOX pay a reliable dividends?
See DOX dividend history and benchmarks