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Amdocs (DOX) Acquires Openet to Strengthen 5G Capabilities

Zacks Equity Research

Amdocs DOX recently inked a definitive agreement to take over 5G charging, policy and cloud technologies provider — Openet. The integration of Openet would facilitate Amdocs’ service provider clients to accelerate their technological transition in a 5G environment. The deal is valued at $180 million and is expected to be closed by the end of fiscal 2020.

Notably, in the past couple of years, Openet has generated revenues of about $70 million per year. The acquisition is expected to be accretive to Amdocs’ non-GAAP earnings per share from fiscal 2022 onward.

Openet’s advanced, open, cloud-native, architecture-powered 5G products are gaining traction worldwide. In addition to expanding the reach of Amdocs’ managed services business, the amalgamation of Amdocs and Openet’s technologies will enable service providers to maximize their opportunities during the 5G adoption uptrend.

Amdocs Limited Price and Consensus

Amdocs Limited Price and Consensus
Amdocs Limited Price and Consensus

Amdocs Limited price-consensus-chart | Amdocs Limited Quote

Efforts to Aid Service Providers

Amdocs has a strong portfolio of managed services and aided notable service provider customers with their technological transformations in the wave of 5G advancements. On Jun 30, the company signed a multi-year managed services deal with CK Hutchison Holdings to enable Three UK to enhance the experience for enterprise customers with new services that can be rolled out and scaled as needed, enabling faster time-to-market. Notably, Three holds more of the U.K.’s leading 5G spectrum than the rest of the industry combined.

Growth areas of AT&T Mobile T, such as Cricket prepaid in Mexico, saw significant value addition by Amdocs, recently. Deal wins, including the one with Veon and a Tier 1 service provider in Spain, are driving revenues. Extension of Managed Services agreements with several customers, including Vodafone Hungary, and partnerships with Capita plc to provide digital business systems are tailwinds.

Another notable step taken by Amdocs in September last year was the acquisition of TTS Wireless to strengthen capabilities in open cloud and the 5G network.

Zacks Rank and Stocks to Consider

Amdocs currently has a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader technology sector are Dropbox, Inc. DBX and Asure Software Inc ASUR, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Dropbox and Asure is currently pegged at 32.51% and 14%, respectively.

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ATT Inc. (T) : Free Stock Analysis Report
 
Amdocs Limited (DOX) : Free Stock Analysis Report
 
Asure Software Inc (ASUR) : Free Stock Analysis Report
 
Dropbox, Inc. (DBX) : Free Stock Analysis Report
 
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