Why Are Cerence Shares Trading Higher Today?

Wells Fargo analyst Colin Langan upgraded Cerence Inc CRNC from Equal-Weight to Overweight and an $85 price target, down from $91, implying a 15% upside.
Langan noted Cerence is down about 50% from its high and 34% since reporting FY21 results and guiding below consensus for FY22.
On the heels of the cautious FY22 guidance, Cerence announced a sudden change in leadership, promoting Stefan Ortmanns to CEO.
With the terrible news seemingly priced in, Cerence is now trading at 7x FY22 EV/Sales, a discount to SaaS peers at 10.6x.
Langan highlights that Cerence is trading at 14x FY23 EBITDA, in line with growth auto parts, yet Cerence has higher margins and long-term growth than these names.
Additionally, Toyota Motor Corp's TM TMNA chose Cerence Browse, an AI-powered, cloud-based content domain, to bring the power and intelligence of internet search engines directly into Toyota and Lexus vehicles in its next-generation multimedia system. TMNA is the first automaker to deploy Cerence's new cloud service.
Price Action: CRNC shares traded higher by 6.86% at $73.94 on the last check Thursday.