Nuance Could Eventually See Its Way Back To $20

Nuance Communications Inc. NUAN closed out 2016 with Q4 results after the market close on Thursday, beating Street estimates across the board.

After the beat, Canaccord Genuity analyst David Hynes Jr. sees a return to growth and recovery to $20.

$20 Trading Price: Not An Unreasonable Expectation

The key metric Hynes used to support his positive rating is the record growth in bookings (45 percent) Nuance saw in its most recent quarter. Even with the aspects of business remaining in transition, the healthy trends in each of the firm’s core operating units are health, according to the analyst.

“Translating this into the numbers, Nuance plans to show organic revenue growth for the first time in years, visibility is improving as recurring revenues increase as a percent of the mix, now at 70 percent of the total, and cash conversion remains at record levels,” said Hynes.

The analyst did warn against volatility, as bookings will “continue to be lumpy” in increments of 90 days.

At the time of writing, shares of Nuance were trading up 12 percent at $17.40.