Leerink Partners Cuts Price Target on Nuance Communications (NUAN) Following Mixed Quarter
Leerink Partners maintained an Outperform rating on Nuance Communications (NASDAQ: NUAN), and cut the price target to $22.00 (from $23.00), following the company's 2Q earnings report. Nuance reported non-GAAP revenue of $487.4m, 1% below consensus. The miss was driven by revenue model shift toward recurring revenue contracts. Non-GAAP EPS came in at $0.38, beating the Street by $0.03.
Analyst Steven Wardell commented, "Nuance printed a mixed quarter and mixed guide for 2016, with topline strength in its growth segments in the quarter offset by revenue erosion and revenue model transition issues leading to a topline miss, but strong cost-cutting delivered a bottom line beat. Management cited strength in healthcare growth segments offset by accelerating erosion of the legacy healthcare transcription business and we see our healthcare thesis as intact. We are tweaking F2016 topline estimates down and bottom line estimates up in line with Guidance and lowering F2017E growth in line with Guidance, and lower our PT to $22 (from $23)."
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Shares of Nuance Communications closed at $17.21 yesterday.