Friday, April 4, 2014

Why Nuance Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, speech-software specialist Nuance Communications (NASDAQ: NUAN  ) has earned a respectable four-star ranking.

With that in mind, let's take a closer look at Nuance and see what CAPS investors are saying about the stock right now.

Nuance facts

Headquarters (founded)

Burlington, Mass. (1992)

Market Cap

$6.1 billion

Industry

Application software

Trailing-12-Month Revenue

$1.8 billion

Management

Chairman/CEO Paul Ricci

CFO Thomas Beaudoin

Return on Equity (average, past 3 years)

2.5%

Cash/Debt

$1.0 billion / $2.3 billion

Competitors

IBM

Microsoft

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 6,018 members who have rated Nuance believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, sikiliza, tapped Nuance as a particularly timely bargain opportunity:

I believe now is a good time to get into the stock. The stock fell 18% after earnings and revenue misses and it's probably at the point of maximum pessimism. With Carl Icahn having taken up a chunk of the shares, I expect that his activism will push management to really put out and reap the potential that Nuance has. The company has waddled along for far too long and it's time that someone woke them up.

Speech recognition is yet another nascent technology set to explode with the rise of tablets and smartphones, and no company is better poised to benefit from this coming boom than Nuance Communications. However, this growth story doesn't come without risks, too. The Motley Fool recently published a premium research report to break down what investors interested in Nuance absolutely have to understand before investing, so click here now to grab your copy today.

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