{ "docId": "019dd923-622c-750b-8b98-b531f2b0553d", "docSlug": "c54d9b8bb206", "documentTitle": "Verint Systems, Inc. (VRNT)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-05-23 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 106, "pageCount": 108, "prevPage": 105, "nextPage": 107, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 28, "notes": "Uses a 'Sell Side Drinking The Kool-Aid' framing to mock analyst optimism.", "elementsJson": [ "headline_text", "paragraph", "comparison_table", "callout_box", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-b531f2b0553d/106", "deckHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d#slide-106", "components": [ { "bbox": { "h": 0.13, "w": 0.46, "x": 0.03, "y": 0.75 }, "kind": "callout", "text": "Sell Side Drinking The Kool-Aid On The KANA Acquisition", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6a013fa4-8c03-4403-aede-aad0b8133c38", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.46, "x": 0.51, "y": 0.75 }, "kind": "callout", "text": "Sell Side Drinking The Kool-Aid Again?", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fec267aa-53f3-4bbf-9a73-8c8cf35c8d70", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "The sell side values VRNT on a P/E basis against Non-GAAP EPS. This approach fails to take into account Verint's poor organic growth, the widening disparity between GAAP EPS and (low-quality) Non-GAAP EPS, and the Company's failure to grow cash flow despite a flood of M&A.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2b65-734e-a977-12f29048b9e3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.94, "x": 0.03, "y": 0.93 }, "kind": "disclaimer", "text": "The sell side values VRNT on a P/E basis against Non-GAAP EPS. This approach fails to take into account Verint's poor organic growth, the widening disparity between GAAP EPS and (low-quality) Non-GAAP EPS, and the Company's failure to grow cash flow despite a flood of M&A.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0955e8e8-7e4b-45aa-90fa-93a8e5d12f9e", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "Price Target: $66", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-2b65-734e-a977-18dbdca45e5a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.94, "x": 0.03, "y": 0.16 }, "kind": "paragraph", "text": "The sell-side can see no evil in Verint: many of the same analysts who rated the stock a “buy” before its FY15 share price collapse from $66 to $30 continue to cover the Company today – and, of course, they rate it as a “buy,” even with just 8% upside on the average analyst price target. This despite the fact that the same playbook is at play: buy poor BPO businesses to cover up slow to negative organic growth, and encourage cross-selling if possible (which it rarely is). The market’s ever-sanguine view of SaaS companies offers management a powerful incentive to boost reported cloud revenue, whether it’s really “cloud” revenue or not.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e9558420-d2ef-4f26-9077-d00d4f5042eb", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Verint has done a great job getting their house in order, achieving solid growth in a tough IT spending environment. And now they do what I would view as a Picasso-like acquisition.\" — Daniel Ives (FBR Capital Markets) on KANA acquisition; \"The acquisition is expected to create a comprehensive omni-channel cloud VoC portfolio by adding ForeSee's causal modeling, predictive analytics, and benchmarking to Verint's domain expertise in automation and analytics. We view the acquisition's rationale and valuation favorably and believe it adds to VRNT's recent solid fundamental performance.\" — Shaul Eyal (Oppenheimer & Co.) on ForeSee acquisition", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2b65-734e-a977-17395375bd7f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.46, "x": 0.51, "y": 0.29 }, "kind": "table", "text": "Current Price Targets", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c34c9bba-96fa-4557-ba22-90d07db80e63", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.46, "x": 0.03, "y": 0.29 }, "kind": "table", "text": "Sell-Side Price Targets As Of May 1, 2015", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f43c53e0-ea8f-40da-8c37-20862c0c34cc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.65, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "Find Me A \"SaaS\" Company The Sell Side Doesn't Like", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "38831f2b-4a71-45b6-9033-5ca19d3234a0", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "a077430c-ee4b-485b-add4-6ef2a5bd4de7", "evidence": "Exposing analyst bias and accounting quality issues to support a short thesis.", "confidence": 0.9 } ], "arcBeats": [ { "to": 108, "from": 97, "beatId": "ff8fed5e-40d0-4155-a774-b16c2d3ea8fa", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Victory (Short Thesis)", "beatSlug": null, "evidence": "The document presents a clear short thesis and valuation analysis.", "position": 2, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 108, "from": 97, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "d5f5ac8d-57b7-4dd0-8454-ec04899411c2", "evidence": "The document presents a clear valuation analysis and downside case.", "position": 1, "objective": "What is the cost of not acting on Verint's short thesis?", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }