Seeking Alpha
View as an RSS Feed

Value Hunter  

View Value Hunter's Comments BY TICKER:

Latest comments  |  Highest rated
  • Verint: 'Big Data' For A Small Price [View article]
    realitycheckjimmy your point is a fair one, historically Verint has been a call recording/workforce scheduling company in its enterprise business. However over the last couple of years and become more significant going forward, analyzing the mass amount of data that they have been recording from an increasing number of types of endpoints is becoming a larger and larger part of the business. 'Big data' is a buzzword, true, but when you think about Verint, it truly is a company that is capturing a massive amount of unstructured data from all different sources. Both Nice and Verint estimate that 40-50% of new business (non-maintenance) is now related to software being used to analyze all the data that they are capturing. The return for customers is a much more rapid and precise understanding of their customer base sentiment as opposed to some call center manager listening in on 500 random sampling of calls. Same goes for email, text, social etc. I have seen this software in action at a wireless phone company trying to understand a spike in churn and the NYPD trying to create alerts from its video surveillance system based on color of a clothing (there was a 60 Minutes on this about 6 months ago). Its early days, but if this trend was obvious to everyone, we would not have this opportunity to buy this stock at 10x earnings.
    Sep 14, 2012. 10:22 AM | 4 Likes Like |Link to Comment
  • Verint: 'Big Data' For A Small Price [View article]
    Sydneyrollock - thanks for the questions - here is my view:
    1. Competitive advantage - 10k customers that VRNT does recoding for globally - their analytics work better on their recording/capture systems and they are already selling to those customers.
    2. The comps above are all in different verticals and the smaller companies do not have recording businesses which is growing in low single digits. The recording business is good and bad, its good in that it is very stable, generates lots of FCF and gives VRNT an easy-in to sell analytics to, the negative is that it drags down the growth rate. The best comp is NICE and they are growing about the same rate.
    3. The debt that you are looking at probably includes the CMVT convert which is already in my share count and not treated as debt. The net debt at the end of 2q was $410m.
    Sep 13, 2012. 03:28 PM | Likes Like |Link to Comment
  • Verint: 'Big Data' For A Small Price [View article]
    Rcsam -you make some great points. A few things: 1. as for the deal the current price is not relevant, CMVT shareholders will get the same number of shares of VRNT stock regardless of price and they get a pre-negotiated premium (see deal announcement 8/13) representing a portion of the value of the foregone PIK interest that they would have been entitled to had they not been bought out early. That number is all set. 2. On the video side you are correct in the most recent quarter it was down, its important to point out that since it is large-deal centric, it is lumpy. The business grew last year and in 2010, and was down a bit in 2011. I expect some growth in 2012 as well. Of the 3 business, video will be the slowest growth and the lumpiest, but nonetheless it has been growing and should continue to grow. 3. Non-GAAP EPS is up slightly this year, as the company has been reinvesting over the past 2 years (hired over 400 people) following the restatement period. After 2012, margins should begin to expand again, some financial de-levering and as a result EPS should grow faster than revenue. 4. On the float side, its less about the free float and more about trading volume, which has been in the 100-150k range quite a low number for many institutions.
    Sep 13, 2012. 10:52 AM | Likes Like |Link to Comment
  • Verint: 'Big Data' For A Small Price [View article]
    Charles, thanks for your comments. If you look at last years revenue of $782M the company adds-back $14M of revenue that could not be recognized due to acquisition accounting, ie deferred revenue of acquired companies that would normally flow into revenue, under GAAP the revenue has to be excluded, but most software companies add it back to revenue as it is a truer measure of run-rate revenue ($796M). My comment of $900m+ in revenue relates to 2013 and that is based on high single digit growth off of $860m in forecasted revenue this year.
    As for net income, I am using a $124M number for Calendar 2011. The number differs from the GAAP number as I am excluding amortization of intangibles, loss on debt extinguishment, preferred dividends (more on that below), some professional fees due to historical restatement and stock comp. While i generally don't like to exclude things, this number more closely resembles cash flow.
    On the preferred, i am including the shares in the stock count (~50m).
    On the competitive front, on the enterprise side Verint has a dominant position along with Nice. The larger players like Cisco are in the infrastructure market, but not in the software market. Other surveillance side, Verint dominates call surveillance; video is more fragmented. The larger players like Microsoft and IBM generally serve as prime contractors / integrators and use the Verint software as part of their larger solutions.
    Sep 13, 2012. 08:28 AM | 3 Likes Like |Link to Comment
COMMENTS STATS
4 Comments
7 Likes