Nuance Communications currently sells for 21 times enterprise value. In this video, Andrew Tonner highlights some risks for this classic growth company:

  • Competition from big players, including Google and Microsoft.
  • The potential for dilution, as Nuance has grown through acquisitions.
  • The threat that small start-up companies are almost certainly going to be entering the market, hoping to offer the next "best in the business" technology.

Check out the video for more details.

Andrew Tonner has no position in any stocks mentioned. The Motley Fool recommends Google and Nuance Communications and owns shares of Google, Microsoft, and Nuance Communications. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.