Sapiens’ (SPNS) Expanding Customer Base Augments Growth

Sapiens International SPNS recently announced that its cloud-first Property and Casualty (P&C) platform IDITSuite is replacing the legacy system of the Netherlands branch of HDI Global Specialty SE (HGS), a global specialty insurance provider.

SPNS’s P&C platform will provide HGS with better automation, standardization and oversight on policies, risk exposures and data. After successfully implementing IDITSuite in the Netherlands branch of HGS, SPNS will expand its services to other European countries like Belgium and Denmark. This will allow the company to further solidify its position in the Insurtech domain across Europe with its P&C platform and grow its market share.

While the other regions of finance have been fast to ride the digitization megatrend, insurance has been one of the sectors which was slow to grasp this. However, with the recent surge of events such as the Covid-19 pandemic and the Russia-Ukraine war, Insurance companies want faster and more cost-effective solutions to reduce operating costs.

Sapiens’ strong portfolio is helping the company expand its partner base and attract new customers across the Americas, Europe and Africa. The company recently expanded its network in North America with CGI, ForMotiv, Hi Marley, ODG by MCG and Opterrix as partners.

The expanded partner base will help Sapiens provide solutions suitable to address the digitization needs of insurance providers. The ongoing demand for digitalization in the sector has increased the demand for Sapiens’ solutions like ReinsurancePro, Intelligence and P&C.

Sapiens International Corporation N.V. Price and Consensus

Sapiens International Corporation N.V. price-consensus-chart | Sapiens International Corporation N.V. Quote

Sapiens Expanding Market Share to Drive Top-Line Growth

Sapiens keeps attracting new customers with its portfolio strength. Its expanding partner base is one of the key catalysts helping the company design specific products and solutions required by insurance companies.

SPNS’ partnership with CGI is enhancing its capability to provide digital services to insurance companies. ForMotive’s real-time machine-learning models, which capture and analyze a huge amount of data-related digital behavior, will help provide personalized user experiences.

Meanwhile, Hi Marley helps carriers succeed with its SMS-powered collaboration platform customized for insurance providers. ODG by MCG offers evidence-based guidelines and technology solutions, which support payers, providers and employers in the insurance sector. Opterrix solutions provide insight into risk-associated exposure to certain geography-related climate-change and weather.

All these are helping Sapiens attract new customers, which is expected to drive its top-line growth. Its solutions have been witnessing increased adoption in international markets. The Sapiens Intelligence solution was deployed by Old Mutual Insure, South Africa’s oldest insurance company. Sapiens’ IllustrationPro, ApplicationPro and DigitalSuite were selected by EquiTrust Life, a leading North American life and health insurance company.

Its top line is expected to benefit from the above-mentioned trends. For 2022, the company expects revenues between $472 million to $478 million, indicating year-over-year growth of 9.5% on a constant-currency basis.

The Zacks Consensus Estimate for 2022 revenues is pegged at $479.60 million, implying 4.03% growth from the figure reported in 2021.

However, Sapiens is plagued by macroeconomic challenges like raging inflation and the war between Russia and Ukraine. Unfavorable forex is a headwind. As a result, revenues are expected to grow a low 2.5% on a constant-currency basis year over year.

All these have adversely impacted the stock price movement of the company. Sapiens’ shares have lost 44.3% compared with the Zacks Computer and Technology sector’s decline of 31.2%.

Also, the Zacks Consensus Estimate for earnings is pegged at $1.17 per share for 2022, indicating a decline of 0.85% from the year-ago quarter.

Zacks Rank & Stocks to Consider

Sapiens currently has a Zacks Rank #3 (Hold).

Here are some better-ranked stocks to consider to drive better returns for your portfolio.

Axcelis Technologies ACLS has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ACLS shares have risen 6% in the year-to-date period compared with the Zacks Electronics – Manufacturing Machinery industry’s decline of 38.8%.

Bumble BMBL has a Zacks Rank #2.

BMBL shares have lost 33.4% in the year-to-date period compared with the Zack Internet Software industry’s decline of 60.1%.

Allied Motion Technologies AMOT has a Zacks Rank #1 (Strong Buy).

AMOT shares have lost 0.9% in the year-to-date period compared with the Zacks Instruments – Control industry’s decline of 15.5%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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