NICE Systems Ltd (NICE) Beat and Raise Driven by Strong Cloud Revenue, PT Cut to $300 at Jefferies But Reit Buy
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Jefferies analyst Samad Samana lowered the price target on NICE Systems Ltd (NASDAQ: NICE) to $300.00 (from $320.00) after 1Q results beat consensus on both the top and bottom line. Cloud revenue growth remained at 33% y/ y despite a tougher comp but most importantly, management noted Cloud revenue is expected to grow at least 25% annually for the next three years with 2021 growth well above this level. Guidance for 2Q Revenue of $445-455M implies 13.9% y/y growth, easily beating Street Consensus of 9.0%. This appears to be better than expected because the beat is driven by better Product and Cloud revs with slower than expected Services implying a healthier mix.
The analyst reiterated a Buy rating, stating "Cloud strength continued, growing 30%+ for the fourth consecutive quarter as cloud adoption improves. This momentum is persisting with the CEO noting record 1Q Cloud bookings. The CFO took it a step further saying NICE expects Cloud growth to exceed 25% in 2021 and sustain at least 25% annually for the next three years. Underlying this strong, persistent growth are several factors: 1. New logo strength; 2. Maintenance base conversion; 3. International growth. On international, bookings for CXone increased 3X y/y in 1Q as NICE expands their channel partner programs."
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