Bullish stock to watch: Amdocs Limited (NASDAQ: DOX)

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Amdocs Limited (NASDAQ: DOX) stock rose over 17.2% in this year to date (Source: Finviz.com) after the company posted mixed results for the fourth quarter of FY 19. The company has generated the free cash flow of $179 million in the fourth quarter. This was comprised of cash from operations of approximately $214 million less $34 million in net capital expenditures and other. Normalized free cash flow for the fourth quarter was $190 million, which is an improvement relative to $89 million a year ago. For the full year fiscal 2019, the company has generated the normalized free cash regeneration of $613 million.

DOX in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.08, beating the analysts’ estimates for the adjusted earnings per share of $1.07, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 2.8 percent to $1.03 billion in the fourth quarter of FY 19

The company’s 12-months backlog was a record of $3,490 million at the end of the fourth quarter of 2019, which is up $90 million sequentially from the end of the prior quarter and equivalent to a year-over-year growth of approximately 4%. The company’s 12-months backlog is mainly on the back of the signing of new deals during the fourth quarter, that also includes the agreement with AT&T and the consolidation of TTS Wireless but does not include the transformation project award with Vodafone Germany, which the company signed in the first quarter of fiscal 2020. The company’s cash balance at the end of fourth quarter was approximately $472 million and reflects the acquisition of TTS Wireless, which the company had closed for approximately $50 million in cash.

Additionally, DOX has authorized an additional share repurchase plan of $800 million with no expiration date. The company has also proposed 16% increase in the quarterly cash dividend for the seventh consecutive year, subject to getting the shareholder approval at the Annual General Meeting in January 2020. During the fourth fiscal quarter, the company had repurchased $90 million of the ordinary shares under the current authorization. The company had $239 million remaining under that authorization as of September 30.

For the full fiscal year 2020, the company expects the total revenue growth to be within the range of about 1.5% to 5.5% as reported and roughly 2% to 6% on constant currency basis

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