Amdocs (DOX) Margin Improvement To 12.5% Tests Longstanding Earnings Skepticism

Amdocs (DOX) has opened Q1 2026 with revenue of US$1.2 billion and basic EPS of US$1.46, setting the tone for investors focused on how profit is tracking against prior quarters. The company has seen quarterly revenue hold around the US$1.1 billion mark over the past year, from US$1.11 billion in Q1 2025 to US$1.16 billion in Q1 2026. Over the same period, basic EPS moved from US$1.34 to US$1.46, and trailing twelve month EPS sits at US$5.19. With net profit margins having improved over the last year, this set of results puts the spotlight firmly on how sustainably Amdocs can keep converting its revenue base into consistent earnings.

See our full analysis for Amdocs.

With the latest numbers on the table, the next step is to see how this earnings profile lines up against the main stories investors have been telling about Amdocs, and where those narratives might need an update.

See what the community is saying about Amdocs

Margins Backed By US$571.1m In TTM Profit

• Over the last 12 months, Amdocs generated US$571.1m in net income on US$4.6b of revenue, which lines up with the 12.5% net margin that has been cited against 10.2% the prior year.
• Consensus narrative points to SaaS, automation and integrated BSS/OSS offerings supporting margin strength, and the numbers give that some backing but also limits:
  • The trailing margin lift from 10.2% to 12.5% sits alongside relatively flat trailing revenue around US$4.6b to US$5.0b, so profitability, not top line expansion, is doing most of the work.
  • At the same time, Q1 2026 net income of US$157.6m is only slightly above Q3 2025 at US$154.0m and below Q2 2025 at US$166.0m, which shows that quarterly profit can still move around even with higher margin commentary.

EPS Trend Versus Five Year Earnings Dip

• Trailing twelve month basic EPS sits at US$5.19, supported by Q1 2026 EPS of about US$1.46 against Q1 2025 at about US$1.34, while the five year backdrop shows average earnings per share decline of 4.5% per year.
• Bulls highlight stronger recent earnings growth and AI or cloud demand, and the data partly supports that but also shows the mixed track record:
  • The latest year is described as having 15.1% earnings growth with net margin at 12.5%, which lines up with the higher recent EPS prints, yet that sits against a multi year pattern of EPS slipping 4.5% per year on average.
  • Quarterly EPS swings from about US$0.76 in Q4 2024 to US$1.48 in Q2 2025 and then down to about US$0.88 in Q4 2025, so while Q1 2026 looks solid, the history in the table shows that earnings per share have not been a straight line.

If you want to see how bullish investors connect these earnings swings to cloud and AI growth stories, check out the latest market bull case for Amdocs: 🐂 Amdocs Bull Case

Valuation Gap With 13.3x P/E And DCF Fair Value

• Amdocs traded on a 13.3x P/E over the last year, compared with 14.4x for peers and 22.5x for the wider US IT group, while the shares at US$70.56 are described as sitting below a DCF fair value of about US$134.88 and an analyst price target of US$93.82.
• Bears worry that slower revenue growth and client concentration justify a lower multiple, and the figures give some grounding to that cautious view:
  • Revenue is forecast at about 3.9% growth per year compared with a 10.3% forecast for the broader US market, which could help explain why the P/E trails the industry even with margin improvement and a 3.23% dividend yield.
  • At the same time, the DCF fair value of US$134.88 and target of US$93.82 are meaningfully above US$70.56, so the current discount assumes that the risks around telecom spending and a handful of large customers remain front of mind for many investors.

Skeptics focus on that slower revenue outlook and client risk, so if you want the full cautious side of the story, this breakdown is worth a look: 🐻 Amdocs Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Amdocs on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With sentiment split between the bull and bear cases, it makes sense to move quickly and check the numbers yourself before opinions harden. To see exactly what is driving the optimism and judge it for yourself, take a look at the company's 5 key rewards.

See What Else Is Out There

Amdocs shows solid recent margins, but relatively flat revenue around US$4.6b to US$5.0b and a five year EPS decline highlight growth headwinds.

If that slower growth profile leaves you wanting more momentum, compare it with companies in our 54 high quality undervalued stocks that pair compressed valuations with stronger earnings potential right now.

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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