Needham & Company Reiterates a 'Buy' on Nuance Communications (NUAN); Thesis Remains Unchanged; FY12 Now Back-end Loaded
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Price: $55.99 --0%
Rating Summary:
8 Buy, 9 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
8 Buy, 9 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company reiterates a 'Buy' on Nuance Communications (NASDAQ: NUAN) price target of $36.00.
Analyst, Scott Zeller, said, "The DecQ (F1Q12) Nuance performance was below expectations on revenue and EPS, and is likely to drag down shares, which have been +22% since Jan 1st. It is our belief expectations were high particularly around the mobile and consumer division of NUAN, which was disappointing; mobile/consumer was +24% y/y revenue as reported for DecQ, but down -9% q/q. It is our belief the miss on revenue and EPS for the quarter was mostly attributable to mobile/consumer due to timing of large mobile deals which have been growing in scale, revenue, and complexity. Management color for guidance was to “bracket” June and reiterate for FY12, essentially back-end loading the year. We admit it is challenging to find tangible evidence of an acceleration of the mobile/consumer business in these results, as they do not show up in deferred revenue, for instance. However, it is our sense that the Apple (Nasdaq: AAPL)/Siri offering is driving spending by other handset manufacturers to “catch up” in offering voice and contextual search – this leads us to believe consumer/mobile will grow and hit our targets in FY12, but may continue to be lumpy."
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 $30.45 yesterday.
Analyst, Scott Zeller, said, "The DecQ (F1Q12) Nuance performance was below expectations on revenue and EPS, and is likely to drag down shares, which have been +22% since Jan 1st. It is our belief expectations were high particularly around the mobile and consumer division of NUAN, which was disappointing; mobile/consumer was +24% y/y revenue as reported for DecQ, but down -9% q/q. It is our belief the miss on revenue and EPS for the quarter was mostly attributable to mobile/consumer due to timing of large mobile deals which have been growing in scale, revenue, and complexity. Management color for guidance was to “bracket” June and reiterate for FY12, essentially back-end loading the year. We admit it is challenging to find tangible evidence of an acceleration of the mobile/consumer business in these results, as they do not show up in deferred revenue, for instance. However, it is our sense that the Apple (Nasdaq: AAPL)/Siri offering is driving spending by other handset manufacturers to “catch up” in offering voice and contextual search – this leads us to believe consumer/mobile will grow and hit our targets in FY12, but may continue to be lumpy."
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 $30.45 yesterday.
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