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In this updated coverage research report, we reexamine the information technology sector company Amdocs Limited — DOX 0.00%↑ — to see if it continues to meet QualityValue Investing’s (QVI) Real-Time Stock Picks criteria based on our proprietary checklist analysis of the business’s current wealth and the share price’s present value.
Amdocs Limited | Current Wealth
Value Proposition
Amdocs Limited is a dividend-paying mid-cap stock in the information technology sector’s IT services industry. It was added to the QVI Real-Time Stock Picks on November 4, 2022, at a cost basis of $77.92 per share, adjusted for dividends paid in cash.
Amdocs Limited and its subsidiaries offer software and services worldwide for communications, entertainment, and media providers. They design, develop, operate, support, and market a modular cloud portfolio. Their offerings include CES24, an AI assistant suite that helps service providers transform their businesses; Amdocs Subscription Marketplace, a SaaS platform with digital services; Amdocs connectX, a cloud-native SaaS platform for digital telecom brands; and Amdocs eSIM Cloud, which enables service providers to enhance their offerings. They provide consulting, experience design, data, cloud, network services, and systems integration. They also offer maintenance, upgrades, deployment, and managed services, including AI, analytics, and RPA. Additional services include quality engineering, mobile network, data intelligence, and professional services. Founded in 1982 in Israel, Amdocs is registered in Guernsey and headquartered in Saint Louis, Missouri, USA.
Economic Moat
Since Morningstar does not cover Amdocs, Quality Value Investing assigns DOX a narrow moat rating based on protection through sticky customer relationships, despite the services being potentially replicable.
QVI’s Value Proposition Elevator Pitch for DOX
Amdocs is a provider of cloud portfolios with nearly 1,000 relationships with major content producers, communication services, and media providers worldwide. It offers various B2B technology products and services in AI, 5G, cloud, and digital.
QVI’s value proposition rating for Amdocs: Bullish.
Returns on Management
Revenue Growth and Profit Margins
As the table below indicates, Amdocs’ trailing five-year annualized revenue growth was positive, mid-single-digit, underperforming the S&P 500’s top-line growth of 15.70%. Additionally, the company’s negative mid-single-digit revenue growth of -6.8% underperformed the broader market’s 18.1% increase for the most recently reported twelve months.
Further down the income statement, Amdocs had a positive double-digit net profit margin from a 37.2% gross margin, underperforming the S&P 500’s net profit of 22.8% from a gross margin of 54.7%.
Returns on Equity and Invested Capital
Amdocs’ senior management produced a return on equity, or ROE, aligned with QVI’s targeted threshold while trailing the S&P 500’s ROE of 48.6%.
Stock buyback programs can boost ROE. Amdocs has a consistent history of share buybacks, with the company announcing a new share repurchase plan for up to $1 billion in May 2025, in addition to a remaining authorization of $258 million from a previous plan. In the second quarter of fiscal 2025, the company repurchased $135 million of its shares and announced an earlier, larger share repurchase program for up to $1.1 billion in August 2023.
Amdocs’s return on invested capital, or ROIC, was below QVI’s threshold and lagged behind the broader market’s 24.9% return. However, the company’s ROIC exceeded its weighted average cost of capital, or WACC, showing that its senior executives are effective at capital allocation.
Owners’ Earnings
In a further test of management effectiveness, the five-year trailing current wealth of owners’ earnings for Amdocs, or EPS growth plus dividend rate growth annualized, was in the higher double digits—an excellent rate of return for shareholders from a mid-cap technology services company.
Notably, dividend growth was the primary driver. However, when substituting free cash flow growth for EPS growth, the company’s five-year owners’ earnings jump to 26.2%.
QVI’s business fundamentals rating for Amdocs: Bullish.
Next, we’ll examine the company’s enterprise downside risks, the stock price’s present value, including shareholder yields, valuation, and share price downside risks, as well as the investment thesis, all exclusive to Quality Value Investing’s premium (paying) subscribers.
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Unless noted, all data presented is sourced from Charles Schwab & Co., Google Finance, GuruFocus, and Yahoo Finance as of the market close on October 15, 2025, and is intended for illustration purposes only.
Disclosure: As of the date of this research report, I/we hold no beneficial positions in DOX common shares in our family portfolio. I wrote this report myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions. I have no business relationship with any company whose stock is mentioned in this post.
Additional Disclosure: Quality Value Investing by David J. Waldron’s primary ticker research reports are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, meaning they are not tailored to individual needs or intended for portfolio construction beyond The QVI Real-Time Stock Picks, which is presented solely for educational purposes. David is a private investor and author, not an investment adviser. Readers should always engage in independent research or due diligence and, as appropriate, consider consulting a fee-only certified financial planner, a licensed discount broker/dealer, a flat fee registered investment adviser, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate planning decisions.
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