Needham & Company Reiterates a 'Buy' on Nuance Communications (NUAN); Raising Numbers Following Strong FY12 Guidance

Needham & Company reiterates a 'Buy' on Nuance Communications (NASDAQ: NUAN) price target raised from $31 to $36.

Needham analyst says, "The Nuance F4Q11(Sept) was in line with the positive preview from mid-October, and well-above original consensus. Initial guidance for F1Q(Dec) and FY12 were above consensus on revenue, and EPS was muted by new interest costs ($690m convertible) and S&M costs for consumer targeting. While many are pointing to the outperformance of the mobile and consumer unit (AAPL, anyone?), we highlight that NUAN’s strong F4Q was a well-balanced quarter. While NUAN management continues to be silent on AAPL, it is likely the attention from Siri/AAPL is driving other deals with handset manufacturers, in a bid to “keep up with Apple”. In our discussion with management, it became clear the volume of mobile and consumer deals is not accelerating, but the nature of such deals is “becoming more strategic”; in our view, mobile players (and consumer device mfrs) are striving to incorporate both voice as well as on-demand services into their offerings...We are raising our estimates for FY12, and introducing FY13 of $2022m and $1.84 EPS."

For an analyst ratings summary and ratings history on Nuance Communications click here. For more ratings news on Nuance Communications click here.

Shares of Nuance Communications closed at $23.13 yesterday.

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