Chardan Initiates NICE-Systems With Buy Rating, $70 Target

Given its robust cash generation and diversified solutions and clients portfolio, Chardan Capital’s Lena Rogovin believes Nice-Systems Ltd (ADR) NICE is well positioned to further increase its market share, both through M&A and organically.

Rogovin initiated coverage of the company with a Buy rating and price target of $70.

The Business Model

“During the last several years, the company's business model has been undergoing a transition from a call center solutions provider to a full scale enterprise software company with a focus on real time analytics and cloud offerings,” the analyst mentioned.

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NICE-Systems operates in the customer interaction and financial crime/compliance segments and has been constantly improving and expanding its product offering, while strengthening cross-selling opportunities among existing customers and expanding into new customer segments.

Growth Expectations

Rogovin pointed out that the global financial crime/compliance market was expected to grow at a CAGR of 11 percent during 2016–2020.

The analyst noted that the company’s second revenue segment “shows superior growth rates, driven by new regulatory requirements for financial institutions and the emergence of more sophisticated fraud schemes.”

In addition, the acquisitions of InContact and Nexidia are expected to strengthen the company’s position in cloud and customer analytics.