UBS Remains Sidelined on Nuance Communications (NUAN) - PT to $16
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UBS reiterated a Neutral rating on Nuance Communications (NASDAQ: NUAN), and raised the price target to $16.00 (from $15.00), following the company's 4Q earnings report.
Analyst Brent Thill commented, "NUAN's F4Q16 had high points (net new bookings growth of +45%, FY17 revenue guidance calling for positive organic growth) as well as some low points (healthcare revenue organically declining -11% y/y, leadership departures, FY17 EPS mid-point of guidance $1.58 coming in below Street $1.63), but we are encouraged by its now over 70% recurring revenue metric. After F1H17, NUAN will be almost fully recurring in important / faster growing areas of the business (Dragon Medical Cloud, which has seen accelerating subscription buying behavior), and will be lapping difficult compares that had perpetual contracts in them; this, in combination with sales realignment efforts (verticalized teams) could help it return to positive organic growth in FY17 and beyond. We believe that near term results may see further instability, but we watch for improving execution in NUAN's subscription transition, sales realignment efforts, and net new bookings growth to gain more conviction in share price appreciation."
Shares of Nuance Communications closed at $15.55 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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