A Look At Amdocs (DOX) Valuation After Renewing Its Five Year T Mobile Contract

Amdocs (DOX) has been back on investors’ radar after renewing a five year contract with T-Mobile, a key customer relationship that had previously raised concerns due to delays and timing questions.

See our latest analysis for Amdocs.

Despite the renewed T-Mobile deal and a steady flow of corporate updates, Amdocs’ recent share price performance has been weak, with a 30 day share price return of an 18.63% decline and a 1 year total shareholder return of a 22.49% decline, which suggests sentiment has cooled rather than gathered momentum for now.

If this contract news has you reassessing the sector, it could be a good moment to scan our list of 33 AI infrastructure stocks as another way to find software driven infrastructure stories.

With the shares under pressure despite recent contract wins, the key question now is whether Amdocs at around $67, with analyst targets clustered near $90, still offers upside potential or if the market is already pricing in future growth.

Most Popular Narrative: 28.3% Undervalued

At a last close of $67.26 versus a most followed fair value of $93.82, the current price sits well below that narrative anchor, which hinges heavily on long term earnings and margin assumptions.

The accelerating adoption of cloud, automation, and AI/ML across telecom and media sectors is driving a multi-year wave of IT stack modernization, with Amdocs winning new large-scale modernization and migration deals in cloud, generative AI, and data services. This is expanding its total addressable market and supporting sustained topline revenue growth.

Read the complete narrative.

Curious how that modernization story translates into the numbers behind $93.82 per share? Revenue expansion, margin lift and a reset earnings multiple all sit at the core of this valuation blueprint, with one set of assumptions doing most of the heavy lifting.

Result: Fair Value of $93.82 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you also need to weigh client concentration and slower than hoped traction in cloud and GenAI services, either of which could challenge that narrative of potential upside.

Find out about the key risks to this Amdocs narrative.

Next Steps

If this mix of optimism and caution leaves you on the fence, it may be worth reviewing the numbers yourself and acting early on your own thesis, starting with 5 key rewards.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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