CIBC Said Verint (VRNT) Order With Wal-Mart Could Propel 2007 Estimates
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Up: 13 | Down: 14 | New: 11
Rating Summary:
3 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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CONTRIBUTOR http://notablecalls.blogspot.com
CIBC notes further support for their theory that Verint (NASDAQ: VRNT) won a major contract with WMT that could propel FY07 ests. A week after VRNT announced a $12M order from an unnamed big boxer, March, formerly WMT's sole video source, said its WMT orders had slowed to a trickle. MN shares fell 43%.
The precipitous fall-off in March's previous ~$14M/qtr business from WMT suggests that the big-boxer has picked a new primary source for video surveillance software. If that new source is Verint, it could see ~$200M in incremental orders over the next 2-4 years, by ofirm's estimates.
A major relationship with WMT would also amount to a major endorsement, potentially further catalyzing VRNT's already enviable position in retail video surveillance solutions. CIBC believes WMT's video business has decent gross margin of ~50%-55%, compared with VRNT's 58% corporate average.
Firm does not believe that the WMT opportunity was fully baked in to 4Q06 guidance, making current Street estimates ($99.7M in revenues vs. firm's $104.8M) appear very conservative. They also see 5%-10% of potential upside to their and consensus FY07 revenue estimates.
Notablecalls: Expect to see a move in VRNT today. The chart looks like it wants to go higher.
http://notablecalls.blogspot.com
CIBC notes further support for their theory that Verint (NASDAQ: VRNT) won a major contract with WMT that could propel FY07 ests. A week after VRNT announced a $12M order from an unnamed big boxer, March, formerly WMT's sole video source, said its WMT orders had slowed to a trickle. MN shares fell 43%.
The precipitous fall-off in March's previous ~$14M/qtr business from WMT suggests that the big-boxer has picked a new primary source for video surveillance software. If that new source is Verint, it could see ~$200M in incremental orders over the next 2-4 years, by ofirm's estimates.
A major relationship with WMT would also amount to a major endorsement, potentially further catalyzing VRNT's already enviable position in retail video surveillance solutions. CIBC believes WMT's video business has decent gross margin of ~50%-55%, compared with VRNT's 58% corporate average.
Firm does not believe that the WMT opportunity was fully baked in to 4Q06 guidance, making current Street estimates ($99.7M in revenues vs. firm's $104.8M) appear very conservative. They also see 5%-10% of potential upside to their and consensus FY07 revenue estimates.
Notablecalls: Expect to see a move in VRNT today. The chart looks like it wants to go higher.
http://notablecalls.blogspot.com
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