What's Going On With Nuance Communications?


27% profits every 20 days?

This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.


  • Shares of Nuance Communications Inc. (NASDAQ: NUAN) surged higher by nearly 15 percent on Tuesday, hitting a new 52-week high of $19.56.
  • Nuance reported its fourth-quarter earnings topped expectations.
  • Nandan Amladi of Deutsche Bank maintained a Buy rating with a price target raised to $30 from a previous $25, noting that the company delivered a "robust finish" to the fiscal year.
  • Nuance Communications reported its fourth-quarter results on Monday. The company earned $0.41 per share in the quarter, topping expectations of $0.35 per share, while revenue of $504.1 million fell slightly short of the $507.84 million analysts were expecting.

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    Analyst's Take

    Nandan Amladi of Deutsche Bank commented in a note that Nuance delivered a "robust finish" to its fiscal year, with bookings and recurring revenue metrics coming in stronger than traditional licenses. At the same time, the company's operating margins rose above the 30 percent mark on cost controls.

    Amladi continued that Nuance's bookings for on-demand and recurring revenue in healthcare were partly derived from the ICD-10 deadline on October 1 and an increasing focus on clinical documentation quality. Meanwhile, automotive has remained a "bright spot" in the "lackluster" mobile and consumer segment, while enterprise ad imaging "remain soft" from on-demand projects that are due to come live in fiscal 2016.

    A Look Ahead

    Looking forward to fiscal 2016, Amladi stated that the company's full-year earnings was "just above" consensus estimates while revenue guidance is in range, "leaving some headroom." In addition, roughly $75 million of the $125 million operating expenditure program has already been implemented and the company still has $490 million remaining in its share buyback authorization.

    Bottom line, Amladi stated that "investors will begin to re-rate Nuance's multiple in coming quarters as both value and growth investors revisit the story."

    Shares remain Buy rated with a price target raised to $30 from a previous $25.

    Image Credit: Public Domain

    27% profits every 20 days?

    This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.


    Posted In: Analyst ColorLong IdeasPrice TargetReiterationTop StoriesAnalyst RatingsTrading IdeascommunicationDeutsche BankNandan AmladiNuance Communications