Shares of automotive cognitive assistance solutions provider Cerence, Inc. (CRNC) have declined 65.3% over the past 12 months. Cerence’s recent first-quarter numbers came in ahead of expectations on both its top-line and bottom-line fronts.
Revenue increased to $94.4 million from $93.6 million a year ago. This figure was better than analysts’ estimates of $94.38 million. Earnings per share at $0.59 came in ahead of expectations of $0.51.
The company expects second-quarter revenue to land between $82 million and $86 million. With these developments in mind, let us take a look at the changes in Cerence’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Cerence’s top risk category is Finance & Corporate, contributing 17 of the total 43 risks identified for the stock, compared to a sector average of 16 risk factors under the same category.
In its recent report, the company has added one key risk factor under the Production risk category.
Cerence highlighted that in December 2021, Stefan Ortmanns replaced Sanjay Dhawan as CEO and as a member of the board. The company noted that this transition will be critical to its success. If this transition fails, then Cerence’s business could see an adverse impact.
Hedge Fund Activity
According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in Cerence by 1.1 million shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 2 hedge funds.
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