Canaccord Genuity Raises Price target on Nuance Communications (NUAN) Following 4Q

Canaccord Genuity reiterated a Buy rating on Nuance Communications (NASDAQ: NUAN), and raised the price target to $22.00 (from $20.00), following the company's 4Q earnings report. NUAN reported Q4/15 non-GAAP revenue and EPS of $513.3M and $0.41, which were respectively $3.3M and $0.06 ahead of Cannaccord's estimates. Nuance provided F2016 revenue growth guidance that bracketed consensus (0-3%) and an EPS outlook that was nicely ahead at mid-point.

Analyst David Hynes commented, "Nuance reported a solid finish to what has been a transitional year, highlighted by bookings growth at the high end of guidance, 250 bps of annual operating margin expansion, and healthy cash conversion. The firm continues to focus on cost reductions, should return to positive organic growth in F2016, and has been executing against an aggressive buy back strategy, which combined we believe should drive double-digit earnings growth next year. We applaud the changes and additional disclosure that management has brought to the business, and we are confident that there is improved visibility and accelerating growth on the horizon. In terms of the stock, NUAN is steadily moving from hated to incrementally interesting among investors, as the consistent execution of late is absolving past sins. Sentiment shifts can be a powerful lever, so we are inclined to let our BUY rating ride for now. However, if NUAN shares were to approach our new $22 target, we would likely consider a downgrade, as we believe multiple expansion from that level is limited. Reiterate BUY."

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 $17.05 yesterday.

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