Hear ye! Hear ye! The town crier (that would be me) is heralding the fiscal fourth-quarter earnings report from Motley Fool Hidden Gems recommendation and speech-recognition firm Nuance Communications
What analysts say:
- Buy, sell, or waffle? A total of 11 analysts now cover Nuance. Six of them give the stock a buy rating, and the other five suggest a hold on shares. In our Motley Fool CAPS community, nearly 4,795 investors have given opinions on the company, giving it a five-star rating (the highest possible).
- Revenue. The average forecast calls for revenue of $172.2 million, a 29% jump from last year's $133.3 million.
- Earnings. The average analyst is estimating net income of $0.15 per share, up slightly from the $0.14 per share last year.
What management says:
Earlier this year, Nuance swallowed a couple of large acquisitions -- Tegic, from Time Warner's
Then, after only a brief M&A hiatus, Nuance picked up the pace again in the last few months with deals to buy companies Commisure, Vocada, and Viecore. CEO Paul Ricci noted in last quarter's report that strong financial results "demonstrate our ability to extend Nuance's position in the global speech industry and to realize the benefits and synergies of recent acquisitions."
What management does:
Bottom-line profitability is not currently an explicit goal for Nuance -- it's more focused on market share and building a competitive moat. Still, investors can see strong growth in operating margins as gross margins slowly decay in the maturing business.
|
3/06 |
6/06 |
9/06 |
12/06 |
3/07 |
6/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
75.1% |
73.4% |
72.2% |
71.3% |
70.1% |
69.9% |
|
Operating |
1.6% |
1.1% |
4.1% |
5.5% |
6.9% |
8.2% |
|
Net |
(5.2%) |
(7.3%) |
(5.9%) |
(4.3%) |
(3.9%) |
(3.2%) |
One Fool says:
Outside of all the acquisitions designed to get more of its products into more industries, Nuance also recently joined the Open Handset Alliance. Standing with companies such as Qualcomm
