Amdocs (DOX) Down 0.7% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Amdocs (DOX). Shares have lost about 0.7% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Amdocs due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. Amdocs Q4 Earnings Match Estimates, Revenues MissAmdocs reported fourth-quarter fiscal 2024 results, wherein earnings matched the Zacks Consensus Estimate but revenues missed the same. However, both top and bottom lines marked a year-over-year improvement.The company reported fourth-quarter non-GAAP earnings of $1.70 per share, matching the consensus mark. The non-GAAP earnings came at the mid-point of management’s guidance of $1.67-$1.73. Quarterly earnings increased 4.9% from the year-ago quarter’s $1.62 per share.Amdocs reported revenues of $1.264 billion, which missed the Zacks Consensus Estimate by 0.71% came within management’s guidance of $1.240-$1.280 billion. Compared with the year-ago quarter, revenues were up 1.7% on a reported basis and 2.1% on a constant-currency basis.Amdocs’ Q4 DetailsAmdocs’ top-line performance was contributed well by year-over-year growth in North America and Europe and the Rest of World (RoW).North America reported revenues of $835.8 million (66.1% of total revenues), which rose 0.2% year over year. Europe revenues (14.6% of total revenues) of $184.1 increased 4.9% year over year.RoW revenues (19.3% of total revenues) grew 4.9% year over year to $244 million. Our model estimates for North America, Europe and RoW were pinned at $834.4 million, $184.1 million and $246.3 million, respectively.Managed services revenues rose 0.5% year over year to $721.4 million. The company ended the fourth quarter of fiscal 2024 with a 12-month backlog of $4.06 billion, up $30 million sequentially and 2.5% year over year. Our model estimates for managed services revenues and backlog were pegged at $736.4 million and $4.27 billion, respectively.The non-GAAP operating income increased 6.8% year over year to $236.2 million, while the operating margin expanded 90 basis points (bps) to 18.7%. Non-GAAP operating margin for fiscal 2024 improved 60 bps to 18.4%.Amdocs’ FY24 Performance in BriefAmdocs reported fiscal 2024 revenues of $5.005 billion, lagging the consensus mark by 0.1%. The top line improved 2.4% year over year on a reported basis and 2.7% in constant currency.Amdocs reported fiscal 2024 non-GAAP earnings of $6.44 per share, matching the consensus mark yet again. The bottom line increased 9% year over year.Balance Sheet and Cash FlowAmdocs had cash and short-term investments of $514.3 million as of Sept. 30, 2024, compared with $502.2 million as of June 30, 2024.Long-term debt was $646.3 million as of Sept. 30, slightly higher than $646.1 million as of June 30.Cash flow from operations was $217.9 million, up from $191.5 million as of Sept. 30, 2024. Free cash flow was $192.1 million compared with the previous quarter’s $175 million.The company repurchased shares worth $563.1 million in fiscal 2024 and paid $212 million in dividends.On November 12, 2024, the Board approved the Company's next quarterly cash dividend payment of 47.9 cents per share, and set December 31, 2024, as the record date for determining the shareholders entitled to receive the dividend, which will be payable on January 31, 2025.Amdocs Initiates Q1 and FY25 GuidanceFor the first quarter of fiscal 2025, Amdocs expects revenues to be in the band of $1.095-$1.135 billion (mid-point $1.115 billion). Amdocs expects non-GAAP earnings per share to be between $1.61 and $1.67.For fiscal 2025, Amdocs expects revenues to decline between 7.7% and 10.9%, on a year-over-year basis.  Non-GAAP operating margin is anticipated to be in the range of 21.1-21.7% for fiscal 2025. Non-GAAP earnings are expected to grow in the band of 6.5-10.5%. The company expects free cash flow to be between $710 million and $730 million.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.VGM ScoresCurrently, Amdocs has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Amdocs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerAmdocs is part of the Zacks Computers - IT Services industry. Over the past month, Epam (EPAM), a stock from the same industry, has gained 1.7%. The company reported its results for the quarter ended September 2024 more than a month ago.Epam reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of +1.3%. EPS of $3.12 for the same period compares with $2.73 a year ago.Epam is expected to post earnings of $2.75 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Epam. Also, the stock has a VGM Score of B.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amdocs Limited (DOX): Free Stock Analysis Report EPAM Systems, Inc. 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