Nuance Communications (NUAN) and Its Rivals Critical Comparison

Nuance Communications (NASDAQ: NUAN) is one of 113 publicly-traded companies in the “Software” industry, but how does it compare to its competitors? We will compare Nuance Communications to similar companies based on the strength of its profitability, dividends, earnings, valuation, analyst recommendations, risk and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and target prices for Nuance Communications and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nuance Communications 0 2 5 1 2.88
Nuance Communications Competitors 388 2285 4331 113 2.59

Nuance Communications currently has a consensus target price of $21.00, indicating a potential upside of 30.60%. As a group, “Software” companies have a potential upside of 11.85%. Given Nuance Communications’ stronger consensus rating and higher probable upside, research analysts plainly believe Nuance Communications is more favorable than its competitors.

Volatility and Risk

Nuance Communications has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Nuance Communications’ competitors have a beta of 0.98, meaning that their average share price is 2% less volatile than the S&P 500.

Institutional & Insider Ownership

84.3% of Nuance Communications shares are owned by institutional investors. Comparatively, 60.7% of shares of all “Software” companies are owned by institutional investors. 1.7% of Nuance Communications shares are owned by company insiders. Comparatively, 17.7% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Nuance Communications and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nuance Communications -3.38% 14.73% 4.83%
Nuance Communications Competitors -24.60% -43.81% -9.10%

Earnings & Valuation

This table compares Nuance Communications and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Nuance Communications $1.98 billion $406.34 million -67.00
Nuance Communications Competitors $1.57 billion $460.84 million 44.29

Nuance Communications has higher revenue, but lower earnings than its competitors. Nuance Communications is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

Nuance Communications beats its competitors on 9 of the 12 factors compared.

About Nuance Communications

Nuance Communications, Inc. is a provider of voice recognition and natural language understanding solutions. The Company’s segments include Healthcare, Mobile, Enterprise and Imaging. The Healthcare segment provides clinical speech and clinical language understanding solutions. The solutions for the Healthcare segment include transcription solutions, Dragon Medical, and clinical document improvement (CDI) and coding solutions. Its Mobile segment provides a portfolio of specialized virtual assistants and connected services. The Enterprise segment provides automated customer solutions and services. The solutions for the Enterprise segment include On-Premise solutions and services, and On-Demand multichannel cloud. The Imaging segment provides software solutions that help professionals and organizations to gain control of their document and information processes. Imaging segment include multi-function printer (MFP) scan automation solutions and MFP Print automation solutions.

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