Updated 4/14/25
Amdocs Limited (DOX) operates at the core of the global communications and media industries, delivering software and services that support customer experience, billing, and network operations for some of the largest telecom providers in the world. Headquartered in Missouri, the company maintains a strong financial foundation, with solid cash flow, consistent profitability, and a shareholder-focused approach that includes a steady dividend and ongoing share repurchases. With a forward dividend yield of 2.53% and a payout ratio under 45%, Amdocs continues to appeal to investors looking for stable returns. Backed by an experienced leadership team, the company is actively investing in cloud and AI solutions, positioning itself for future growth while maintaining operational discipline. Despite a recent dip in revenue tied to the phasing out of non-core segments, Amdocs remains profitable and focused on long-term strategy.
📌 Recent Events
Over the last year, Amdocs shares have slid by just over 2%, even as the S&P 500 has pushed higher. That underperformance might raise eyebrows, but dig a little deeper and the picture looks more stable than the price action suggests.
In its most recent quarter, Amdocs reported a year-over-year revenue decline of nearly 11%. That’s clearly not ideal. But at the same time, net income rose slightly, and earnings per share nudged higher by 2%. That tells you the company is managing costs well—even as sales dipped, profitability didn’t falter.
Margins remain healthy. Operating margin is sitting near 18.5%, and net margin is over 10%, showing that the business continues to run efficiently. Free cash flow is also solid, with over $600 million in levered free cash flow in the past 12 months. A good chunk of that is being returned to shareholders through dividends, a positive signal for long-term holders.
💰 Key Dividend Metrics
🔔 Forward Dividend Yield: 2.53%
📅 Dividend Date: April 25, 2025
📈 5-Year Average Yield: 1.92%
💵 Forward Annual Dividend: $2.11 per share
📊 Payout Ratio: 44.35%
📉 Ex-Dividend Date: March 31, 2025
These are the kind of numbers that appeal to steady-handed income investors. The yield is comfortably above the company’s own five-year average, and the payout ratio is well within sustainable territory.
🧾 Dividend Overview
One thing that stands out about Amdocs is how quietly consistent it’s been in paying and growing its dividend. At a 2.53% forward yield, it’s not high-octane income, but it’s more generous than what it’s paid historically. And for investors who appreciate getting paid to wait, that’s a welcome development.
Cash generation remains strong, and with a payout ratio around 44%, there’s no stretch here. That means even if earnings wobble a bit, the dividend doesn’t have to.
The business model helps too. Amdocs works in long-term service contracts, and that predictability supports consistent cash flow. It’s not a hyper-growth story, but for dividend investors, that’s often a plus.
📈 Dividend Growth and Safety
Amdocs may not raise its dividend in leaps and bounds, but the growth is there—and it’s steady. Each year brings a modest increase, typically a few cents at a time. That reliability makes it easier to build income over time, especially when paired with reinvestment.
What really underscores the dividend’s safety is the company’s financial position. Total debt remains manageable, with a debt-to-equity ratio under 23%. Liquidity looks solid too, with a current ratio above 1. That means there’s enough cushion to cover near-term obligations without stress.
Cash flow is the engine here. With over $600 million in free cash flow on a market cap just above $9 billion, the company has the resources to keep the dividend growing. That’s exactly the kind of setup income investors should be looking for—stable business, disciplined capital allocation, and room to maneuver.
And here’s a quieter signal that often goes unnoticed: institutional ownership is essentially 100%. That means the big players—mutual funds, pension plans, long-term investors—are backing this name. They don’t chase trends; they look for reliability. And they’ve clearly found something they like in Amdocs.
This is a name that keeps showing up for investors who value cash flow and quiet consistency. The kind of stock that doesn’t need to shout for attention, because its numbers already do the talking.
Cash Flow Statement
Amdocs continues to demonstrate solid cash generation, with trailing 12-month operating cash flow reaching $647.6 million. While this is a decline from last year’s $724.4 million, it still shows the company’s ability to consistently pull in strong operating cash, even in a more pressured revenue environment. Capital expenditures came in at $89.1 million, slightly lower than the prior year, leaving the company with $558.5 million in free cash flow—plenty of cushion to support dividends and buybacks.
On the financing side, the outflows remain substantial, totaling $766.1 million over the trailing 12 months. This is mostly driven by share repurchases, which accounted for over $549 million, reflecting management’s ongoing commitment to returning capital to shareholders. Amdocs’ cash position has decreased in recent years, ending the most recent period with $213.8 million compared to over $709 million in 2021. However, the company is not heavily reliant on debt, and this cash usage appears to be strategic, not symptomatic of financial stress.
Analyst Ratings
Amdocs Limited (DOX) has recently seen a mix of analyst activity, reflecting a generally positive outlook tempered by some cautious recalibration. 📊 The current analyst consensus is a “Moderate Buy,” with the average 12-month price target sitting around $101.20. 🎯 That implies a potential upside of just over 21% from where the stock is currently trading.
Over the past few months, several firms have reiterated their positive stance while nudging their price targets higher. For example, Oppenheimer has maintained its “Outperform” rating but bumped the target up to $105 from $98. 🟢 That move signals continued confidence in Amdocs’ long-term prospects. Likewise, Citigroup has kept a “Buy” rating in place and lifted its target to $104 from $96. These kinds of upward adjustments typically come when analysts see operational strength or compelling value in the current share price.
On the more conservative end, Baird opted to hold its “Neutral” rating but trimmed its target from $97 to $90. 🟡 That may reflect concerns over slowing revenue growth or broader sector trends impacting IT service providers. While not a bearish call, it’s a signal to watch how market sentiment develops.
In short, analysts generally remain constructive on Amdocs, with a few dialing back their enthusiasm slightly. The company’s dependable cash flow and stable margins seem to be keeping it in good standing with most of the research desks.
Earnings Report Summary
Amdocs kicked off fiscal 2025 with a mixed but telling quarter that reflects the transition it’s navigating. Revenue came in at $1.11 billion, which on the surface was down almost 11% from the year before. But once you strip out the effects of currency shifts and the company’s move away from some of its lower-margin, non-core business, the numbers start to look more stable. Adjusted for those factors, revenue actually grew by about 1.7%—a small but meaningful sign that the core of the business is holding up well.
Profitability Holding Strong
Earnings were one of the bright spots. Amdocs posted non-GAAP earnings per share of $1.66, landing right at the top end of its guidance. That performance speaks to how well the company has tightened up operations. As it exits areas that weren’t contributing much to the bottom line, it’s seeing better margins—non-GAAP operating margin jumped to 21.2%, a notable improvement from the same time last year.
One of the biggest contributors to that margin growth has been the strength of Amdocs’ managed services business. This segment brought in $729 million, making up about two-thirds of total revenue. It’s a reliable piece of the business, and the company is leaning into it. The backlog of work also ticked higher to $4.14 billion, giving some visibility into future revenue.
Cash generation remained solid. Amdocs pulled in $106 million in operating cash flow and produced $78 million in free cash flow. Not blockbuster numbers, but steady enough to support ongoing shareholder returns. In fact, the company bought back $144 million worth of shares during the quarter—a sign it feels confident in the long-term value of its stock.
Guidance and Looking Ahead
Looking to the rest of fiscal 2025, Amdocs expects revenue to decline between 8.5% and 11.6% on a reported basis. But again, that’s largely due to stepping away from some non-core areas. When adjusting for those changes and currency impacts, they’re actually projecting growth of up to 4.5%. It’s a shift in strategy more than a sign of business weakness.
Leadership emphasized a continued focus on higher-value opportunities, particularly in cloud services and AI-driven solutions. These areas are expected to be the growth engines moving forward. The company also reaffirmed its full-year operating margin forecast and is targeting free cash flow in the range of $710 to $730 million.
So while the headline numbers might look a bit softer at first glance, the underlying story here is about refinement. Amdocs is trimming what’s not working, doubling down where it sees real value, and staying committed to rewarding shareholders along the way.
Chart Analysis
The stock chart for DOX over the past year gives a clear view of how price action has developed and where momentum has shifted. At a glance, the stock has traded within a fairly defined range, with a few notable swings and recoveries along the way. While the short-term moves have been somewhat volatile, the overall trend since last spring has leaned gradually higher until a recent pullback.
Moving Averages
The 50-day moving average (in red) spent much of the earlier part of the year below the 200-day moving average (in blue), reflecting weakness from spring into early summer. That started to shift by late July when the stock regained upward momentum, and the 50-day began climbing again. It crossed above the 200-day in early September, which is typically viewed as a bullish signal. More recently, however, the 50-day has flattened and started to curl downward slightly as the price dipped below both moving averages. This isn’t a major red flag on its own but does suggest some cooling in momentum.
Volume Trends
Volume appears fairly steady across the chart with a few sharp spikes, typically around earnings announcements or notable price reactions. None of the spikes suggest panic selling or blowout buying. This kind of volume pattern usually points to a well-owned, stable stock without much speculative churn.
Relative Strength Index (RSI)
The RSI shows some interesting behavior. In early summer, the stock was firmly in oversold territory, and from that point, the recovery began. It remained mostly in the mid-range through the fall and winter, with occasional trips into the overbought zone, especially in February. Lately, RSI dipped near oversold again, aligning with the recent decline in price. This might signal short-term exhaustion on the sell side and potential for a bounce, depending on broader sentiment.
General Observations
Looking at the full picture, DOX has been through a typical cycle of decline, recovery, and consolidation. It’s currently in a testing phase, retesting levels it hasn’t seen since mid-January. The stock is sitting near support and showing signs of trying to hold that level after a dip below both major moving averages. While momentum has cooled, the pattern doesn’t show signs of collapse—rather, it looks like a reset in progress, which isn’t uncommon in a stock with a long-term stable profile.
The stock’s ability to hold this zone and regain strength in the coming weeks will be telling. For now, the chart suggests a wait-and-see posture, with recent price action offering a potentially interesting level to monitor.
Management Team
Amdocs is guided by a leadership team with years of experience both within the company and across the broader tech landscape. Leading the charge is Shuky Sheffer, who has been President and CEO since 2018. His career with Amdocs stretches back several decades, giving him an in-depth understanding of the company’s operations and long-term strategy. His previous executive role at another software firm added to the leadership depth he brought back to Amdocs.
Working alongside him is Tamar Rapaport-Dagim, who plays a dual role as both Chief Financial Officer and Chief Operating Officer. She’s been with Amdocs since 2004 and has a strong background in finance and accounting. Her leadership has helped the company stay financially disciplined, which is especially important in periods of strategic transition. Other key team members include Rajat Raheja, who leads the India division, and Gil Rosen, who heads up marketing. Together, this team is steering the company toward newer tech frontiers while keeping its core strengths intact.
Valuation and Stock Performance
At a recent price of $83.18, shares of Amdocs have held up reasonably well, considering the shifts across the tech sector over the past year. The stock has moved within a 52-week range of $74.41 to $94.04, showing some volatility but nothing outside of typical market behavior for a company in this space. The current market cap sits around $9.3 billion, and the stock trades at roughly 19 times trailing earnings.
For those watching valuation closely, that price-to-earnings ratio is about in line with industry norms, suggesting the stock isn’t overheated but also isn’t trading at a major discount. More telling, though, is the consistency in the company’s return metrics. Return on equity sits above 21%, a level that reflects strong capital management. Amdocs is also continuing to reward shareholders through its dividend, with a yield of 2.53% based on the most recent payout. Even in a market that’s focused on growth, that kind of income can help smooth out the ride.
Risks and Considerations
Every company has its vulnerabilities, and Amdocs is no exception. One of the biggest is its heavy exposure to the telecom industry. This has traditionally been a strength because telecom clients tend to be sticky, long-term partners. But it also means that any slowdown in telecom investment or disruption in that sector can impact Amdocs directly. Regulatory shifts and tech changes in the space could also ripple through to the company’s revenue.
Amdocs is making a push into AI and cloud services, which could open new doors—but it also puts the company up against some very big competitors. There’s opportunity, but also risk in trying to scale these offerings fast enough to keep up. And while the company’s balance sheet is in good shape today, keeping debt under control will be key if acquisitions or expansion projects start to ramp up. A careful watch on how they manage this next phase of growth will be important.
Final Thoughts
Amdocs offers something that’s a bit harder to find in the tech sector these days: consistency. It’s not making headlines every week, but it’s putting up solid numbers, maintaining a steady dividend, and gradually positioning itself for the future. The leadership team seems focused on the long game, and the moves into new tech spaces like AI and cloud infrastructure are aligned with where the broader industry is heading.
The stock isn’t priced for perfection, but it’s also not showing signs of distress. For investors looking for names that blend operational reliability with a shareholder-friendly approach, Amdocs stands out as a company that’s quietly delivering on both fronts. As always, the future will depend on execution, but so far, the fundamentals remain intact and the direction looks thoughtful.