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Did You Miss Verint Systems' (NASDAQ:VRNT) 92% Share Price Gain?

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Simply Wall St
·3 min read
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If you buy and hold a stock for many years, you'd hope to be making a profit. Better yet, you'd like to see the share price move up more than the market average. But Verint Systems Inc. (NASDAQ:VRNT) has fallen short of that second goal, with a share price rise of 92% over five years, which is below the market return. Some buyers are laughing, though, with an increase of 23% in the last year.

Check out our latest analysis for Verint Systems

We don't think that Verint Systems' modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last 5 years Verint Systems saw its revenue grow at 4.0% per year. Put simply, that growth rate fails to impress. It's probably fair to say that the modest growth is reflected in the modest share price gain of 14% per year. If profitability is likely in the near term, then this might be one to add to your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

This free interactive report on Verint Systems' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Verint Systems' TSR for the year was broadly in line with the market average, at 23%. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 14%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Verint Systems , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.