editorial-team@simplywallst.com (Simply Wall St)
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Investors in Amdocs Limited (NASDAQ:DOX) had a good week, as its shares rose 2.3% to close at US$91.48 following the release of its quarterly results. Amdocs reported US$1.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.45 beat expectations, being 4.7% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus, from the five analysts covering Amdocs, is for revenues of US$4.52b in 2025. This implies a noticeable 4.9% reduction in Amdocs’ revenue over the past 12 months. Per-share earnings are expected to leap 20% to US$5.79. Before this earnings report, the analysts had been forecasting revenues of US$4.52b and earnings per share (EPS) of US$5.28 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Amdocs
There’s been no major changes to the consensus price target of US$102, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock’s valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Amdocs, with the most bullish analyst valuing it at US$111 and the most bearish at US$91.56 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 9.5% annualised decline to the end of 2025. That is a notable change from historical growth of 4.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Amdocs is expected to lag the wider industry.
