Amdocs Ltd (DOX) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001062579

P/B 2.58

P/E 15.68

P/S 1.95

Market Cap 8.85 Bn

ROIC (Qtr) 13.66

Div Yield % 2.59

Rev 1y % (Qtr) -8.99

Total Debt (Qtr) 826.40 Mn

Debt/Equity (Qtr) 0.24

About

Amdocs Ltd., a leading provider of software and services for the communications and media industry, operates on a global scale, serving over 400 service providers worldwide. The company's primary business activities include developing, implementing, and managing software and services for the communications and media industry, with a focus on customer experience, digital transformation, and cloud migration. Amdocs Ltd. operates in several segments, including customer experience, monetization, and intelligent networking. Amdocs generates revenue...

Amdocs Ltd., a leading provider of software and services for the communications and media industry, operates on a global scale, serving over 400 service providers worldwide. The company's primary business activities include developing, implementing, and managing software and services for the communications and media industry, with a focus on customer experience, digital transformation, and cloud migration. Amdocs Ltd. operates in several segments, including customer experience, monetization, and intelligent networking.

Amdocs generates revenue through its software and services offerings, which cater to the needs of its customers in the communications and media industry. The company's primary products and services include its customer experience suite, monetization suite, and intelligent networking suite. The customer experience suite includes GenAI, a cloud-native, AI-powered platform that enables service providers to deliver personalized and intelligent customer experiences. The monetization suite includes products such as charging, policy, and network data analytics, which enable service providers to manage their networks and deliver new services to their customers. The intelligent networking suite includes products such as network deployment and optimization, which enable service providers to quickly and efficiently deploy new networks and services.

The company's customer base includes some of the largest telecommunications companies in the world, as well as broadband, mobile, and entertainment providers. Amdocs' customers include America Movil, AT&T, Bell Canada, Singtel, Telefonica, Telstra, T-Mobile, Verizon, and Vodafone, among others. The company also holds relationships with hundreds of content owners and distributors around the globe, including MGM and Warner Bros. Discovery.

Amdocs has a strong position within the industry, with a reputation for delivering high-quality solutions and a commitment to customer satisfaction. The company's competitive advantages include its deep industry knowledge, advanced technologies, and ability to provide a broad range of solutions to meet the needs of its customers. The market for customer experience solutions in the communications and media industry is highly competitive, with a number of established players and new entrants vying for market share. Amdocs competes with a range of companies, including internal IT departments of its customers, as well as independent competitors and new entrants.

In terms of its business strategy, Amdocs seeks to provide software and services solutions to communications and media companies, with a goal of delivering an amazing customer experience and accelerating their digital transformation. The company aims to accomplish this through a combination of strategic partnerships, innovative technologies, and a commitment to customer satisfaction.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 749.10M provides robust 0.91x coverage of total debt 826.40M, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 325M provide 8.39x coverage of short-term debt 38.73M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of 749.10M provides exceptional 244.40x coverage of minority interest expenses 3.06M, showing strong core operations.
Operating cash flow of 749.10M provides exceptional 19.50x coverage of interest expenses 38.42M, showing strong debt service capability.
Strong tangible asset base of 3.20B provides 3.88x coverage of total debt 826.40M, indicating robust asset backing and low credit risk.

Cons

Operating cash flow of 749.10M barely covers its investment activities of (2.06M), with a coverage ratio of -363.46, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 749.10M provides thin coverage of dividend payments of (224.39M) with a -3.34 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Investment activities of (2.06M) provide weak support for R&D spending of 340.85M, which is -0.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 325M provide limited coverage of acquisition spending of (86.32M), which is -3.77x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
Operating cash flow of 749.10M is outpaced by equity issuance of (530.05M) (-1.41 ratio), indicating concerning reliance on equity markets for funding operations.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.50	2.56
EV to Cash from Ops.	12.48	38.32
EV to Debt	11.31	-11.37
EV to EBIT	12.83	-12.79
EV to EBITDA	10.08	7.72
EV to Free Cash Flow [EV/FCF]	14.49	24.22
EV to Market Cap	1.06	0.58
EV to Revenue	2.06	-35.00
Price to Book Value [P/B]	2.58	3.74
Price to Earnings [P/E]	15.68	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	2.52	-0.30
Dividend Payout Ratio %	40.60	2.69
Dividend per Basic Share	2.06	0.10
FCF Dividend Payout Ratio %	35.50	1.67
Interest Coverage	18.96	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	1.46	-404.11
Cash and Equivalents Growth (1y) %	-36.81	226.02
Dividend Growth (1y) %	10.04	-0.27
EBIAT Growth (1y) %	13.62	31.15
EBITDA Growth (1y) %	12.53	49.02
EBIT Growth (1y) %	16.49	25.85
EBT Growth (1y) %	17.39	17.82
EPS Growth (1y) %	18.97	70.69
FCF Growth (1y) %	4.23	295.45
Gross Profit Growth (1y) %	-1.93	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.73	0.68
Cash Payout Ratio	0.26	0.02
Cash Ratio	0.24	1.21
Current Ratio	1.17	2.57
Debt to Equity Ratio	0.24	-0.93
Interest Cover Ratio	18.96	-13.15
Times Interest Earned	18.96	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	20.40	-544.82
EBIT Margin %	16.07	-197.78
EBT Margin %	15.23	-602.74
Gross Margin %	38.00	52.06
Net Profit Margin %	12.50	-605.52

Amdocs Ltd (NASDAQ: DOX)