Amdocs plunges to lowest level since 2014 as T-Mobile dispute rattles investors
The stock dropped about 30% at the start of trading on Wednesday after Amdocs warned of falling revenue and profit and said its forecast allows for the loss of T-Mobile contracts.
Amdocs shares fell about 30% at the start of trading on Wednesday, a level the stock has not seen since 2014, a day after the company warned of falling revenue and profit and said its forecast allows for T-Mobile terminating its contracts.
The drop erased roughly $2 billion of market value from a company worth about $6.5 billion at Tuesday's close of $62.43. The shares had fallen as much as 45% in after-hours trading on Tuesday, near $34.50, before recovering part of the loss overnight.
The gap between Amdocs' outlook and expectations was wide. The company guided first-quarter revenue of $955 million to $995 million, against a consensus of about $1.2 billion. First-quarter non-GAAP earnings per share are guided at $1.27 to $1.33, against an expected $1.93.
For the full year, Amdocs expects non-GAAP earnings per share to fall 26% to 30%, to roughly $5.19 to $5.48 by our calculation, after $7.41 in fiscal 2026. It guided revenue down 14.3% to 17.9% as reported, or 7% to 11% excluding the exited businesses.
The central worry is T-Mobile. Amdocs said the guidance reflects "our best estimate as of this date, including in case of termination of our agreements with T-Mobile by either party," though CEO Shimie Hortig said no termination has occurred. He declined to say how much revenue the carrier represents.
Amdocs had already slid before the results. At Tuesday's close the stock was about 27% below its 52-week high of $85.63, and Wednesday's drop leaves it more than 50% below that level. The company's previous 52-week low of $49.74 has been broken.
Hortig called the dispute "an isolated situation involving one customer" and said the rest of the business should grow in the mid-single digits in fiscal 2027. "Although 2027 will be financially challenging, it will also be a year of strategic transition," he said, adding that he expects "mid-single-digit revenue growth" in fiscal 2028.
He pointed to a new eight-year agreement with AT&T, Amdocs' largest customer, and to deals with VEON, Globe and VodafoneThree, though the company gave no financial terms.
