Oppenheimer Remains Bullish on Nuance Communications (NUAN) Following Mixed 3Q
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Oppenheimer reiterated an Outperform rating and $26.00 price target on Nuance Communications (NASDAQ: NUAN) following the company's 3Q earnings report. NUAN reported revenues of $484.9M, slightly below the Street’s $489.5M forecast due to a weak performance in the Healthcare segment. EPS of $0.38 rose 19.7%year-over-year, beating the Street's $0.37 estimate.
Analyst Shaul Eyal commented, "NUAN reported mixed F3Q16 results. Revenue came in at the low end of guidance ($485M vs. the Street's $489M view), but there was strong performance in CFFO ($126M vs. the Street's $98M), driven by the ongoing improved operational efficiencies. Every company segment exceeded guidance in revenues with the exception of Healthcare (~50%), impacted by the ongoing transition into cloud offerings from transcription products (expecting the transition to complete by end of FY17). We are tweaking our FY16-17 estimates and introducing FY18 revenue/EPS estimates of $2,067 (up 2% YoY)/$1.78. Although NUAN continues to execute its operational efficiencies plan, trimming estimates is slightly discouraging. We remain hopeful in the smoothing of the cloud transition effects via the company's strategic bundled offerings. Maintain Outperform."
Shares of Nuance Communications closed at $16.30 yesterday.
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