Oppenheimer Reiterates a Buy Rating on Nuance Communications

By Ryan Adsit

In a report released today, Shaul Eyal from Oppenheimer reiterated a Buy rating on Nuance Communications (NASDAQ: NUAN), with a price target of $26. The company’s shares closed yesterday at $15.55.

Eyal commented:

“NUAN reported positive F4Q16 results, exceeding guidance and beating consensus revenue, operating margin, EPS, and CFFO estimates, driven by strong top-line growth and margin improvement in the Enterprise segment ($109M, +23.3% YoY). Imaging ($66.4M, +7.3%) also performed well following its Power PDF 2.0 launch, while making significant operational improvements (profit margin of 47% vs. 36% in F3Q16). Healthcare ($239.8M, -0.6% YoY) fell short of the Street’s $247.3M (despite record net new bookings), impacted by the declining transcription business. NUAN’s longstanding Chairman & CEO, Paul Ricci, has advised the BOD of his plans to retire in F1H18 following his contract completion. We envision a smooth transition process once a new CEO steps into Ricci’s shoes. We remain positive on NUAN’s execution and future in AI.”

According to TipRanks.com, Eyal is a top 100 analyst with an average return of 11.4% and a 60.4% success rate. Eyal covers the Technology sector, focusing on stocks such as CSG Systems International, IAC/InterActiveCorp, and Verint Systems Inc.

Nuance Communications has an analyst consensus of Moderate Buy, with a price target consensus of $26.

Based on Nuance Communications’ latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $506 million and quarterly net profit of $18.47 million. In comparison, last year the company earned revenue of $504 million and had a GAAP net loss of $11.03 million.

Based on the recent corporate insider activity of 70 insiders, corporate insider sentiment is neutral on the stock. Most recently, in March 2016, Mark Laret, a Director at NUAN sold 14,000 shares for a total of $273,701.

Nuance Communications, Inc. provides voice and language solutions for businesses and consumers around the world. Its solutions are used in healthcare, mobile, consumer, enterprise customer service and imaging markets. The company products are based on proprietary voice and language platform. It operates under four segments: Healthcare, Mobile & Consumer, Enterprise and Imaging. The Healthcare segment provides transcription solutions and services that automate the input and management of medical information. The Mobile & Consumer segment offers integrated suite of voice control and text-to-speech solutions, dictation applications, predictive text technologies, mobile messaging services and emerging services such as dictation, Web search and voicemail-to-text. The Enterprise segment offers customer service business intelligence and authentication solutions that are designed to support, understand and communicate with their customers. The Imaging segment offers optical character recognition technology to deliver document scanning and storage solutions, including networked print management and comprehensive PDF applications designed specifically for business users. The company was founded in March 1992 and is headquartered in Burlington, MA.