Nuance Communications Inc. (NUAN) Testing Investors’ Patience Right Now


    Viking Global Investors LP recently announced the acquisition of new stake in Nuance Communications Inc. (NASDAQ:NUAN). The institutional investor has increased its shareholding in the Technology company by 12.09% to 14.35 million shares with purchase of 1.55 million shares. This fresh investment now brings its stake to 5.10% valued currently at $392.39 million. In addition, Eminence Capital LP raised its holdings by 7.54 million to 10.48 million shares. And Parnassus Investments has lifted its position by 16.68% or 1.15 million shares – to 8.04 million shares.

    With over 4.69 million Nuance Communications Inc. (NUAN) shares trading Tuesday and a closing price of $31.29 on the day, the dollar volume was approximately $146.74 million. The shares have shown a positive weekly performance of 7.01% and its price on 09/01/20 gained nearly 4.44%. Currently, there are 281.28M common shares owned by the public and among those 279.99M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 8 analysts who have offered their price forecasts for NUAN have a consensus price objective of $32.43. The analysts have set the share’s price value over the next 12 months at a high of $36.00 and a low of $26.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Nuance Communications Inc. stock is 1.90 for the next 12 months. The average price target is 3.52% above its last price level and an upside to the estimated low will see the stock lose -20.35% over that period. But an upside of 13.08% will see the stock hit the forecast high price target while mean target price for the stock is $33.00.

    Insiders at the company have transacted a total of 218 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 32 of these insider trades were purchases, accounting for 1,039,093 shares. Insider sales of the common stock occurred on 186 occasions, with total insider shares sold totaling 925,720 shares.

    The top 3 mutual fund holders in Nuance Communications Inc. are ClearBridge Aggressive Growth Fun, Vanguard Total Stock Market Index, and Parnassus Mid Cap Fund. ClearBridge Aggressive Growth Fun owns 8.14 million shares of the company’s stock, all valued at over $222.7 million. Vanguard Total Stock Market Index sold 28961.0 shares to see its total holdings shrink to 8.0 million shares valued at over $218.68 million and representing 2.84% of the shares outstanding. Parnassus Mid Cap Fund now owns shares totaling to 2.71% of the shares outstanding.

    Shares of Nuance Communications Inc. (NASDAQ: NUAN) opened at $30.15, up $0.19 from a prior closing price of $29.96. However, the script later closed the day at $31.29, up 4.44%. The company’s stock has a 5-day price change of 7.01% and 36.58% over the past three months. NUAN shares are trading 75.49% year to date (YTD), with the 12-month market performance up to 120.40% higher. It has a 12-month low price of $13.51 and touched a high of $30.28 over the same period. Currently, 4.69 million shares have been traded, compared to an average intraday trading volume of 3.48 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 7.32%, 14.97%, and 46.41% respectively.

    Institutional ownership of Nuance Communications Inc. (NASDAQ: NUAN) shares accounts for 98.40% of the company’s 281.28M shares outstanding. Mutual fund holders own 47.34%, while other institutional holders and individual stakeholders account for 52.55% and 16.66% respectively.

    It has a market capitalization of $8.83B and a beta (3y monthly) value of 1.03. The stock’s trailing 12-month PE ratio is 57.52, while the earnings-per-share (ttm) stands at $0.54. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.78% over the week and 2.80% over the month.

    Analysts forecast that Nuance Communications Inc. (NUAN) will achieve an EPS of $0.16 for the current quarter, $0.24 for the next quarter and $0.87 for 2021. The lowest estimate earnings-per-share for the quarter is $0.15 while analysts give the company a high EPS estimate of $0.18. Comparatively, EPS for the current quarter was $0.34 a year ago. Earnings per share for the fiscal year are expected to increase by 140.50%, and 6.33% over the next financial year. EPS should shrink at an annualized rate of -4.60% over the next five years, compared to 23.10% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 8 brokerage firm advisors rate Nuance Communications Inc. (NUAN) as a “Strong Buy” at a consensus score of 1.90. Specifically, 6 Wall Street analysts polled rate the stock as a buy, while 2 of the 8 advise that investors “hold,” and 0 rated it as a “Sell.”

    Looking at the support for the NUAN, a number of firms have released research notes about the stock. CFRA stated their Sell rating for the stock in a research note on August 06, 2020, with the firm’s price target at. SVB Leerink coverage for the Nuance Communications Inc. (NUAN) stock in a research note released on June 29, 2020 offered a Outperform rating with a price target of $31. Guggenheim was of a view on April 14, 2020 that the stock is Neutral, while Morgan Stanley gave the stock Overweight rating on January 13, 2020, issuing a price target of $15- $23. Morgan Stanley on their part issued Equal-Weight rating on January 15, 2019.


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