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NICE (NICE)
NASDAQ:NICE
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NICE
(NASDAQ:NICE)
73Outperform
Positive Factors
AI Integration
The company delivers excellent products, particularly in customer experience, that increasingly embed AI functionality and earn top ratings and recognition from customers, as well as third-party sources like Gartner.
Leadership
The new CEO Scott Russell's experience in the enterprise GTM space and his focus on strengthening NICE’s ecosystem/partnerships and enhancing platform capabilities is encouraging.
Negative Factors
Cloud Revenue Guidance
2025 Cloud revenue growth guidance of 12% Y/Y implies a 4-5pt Y/Y deceleration and was significantly below consensus estimates.
Market Competition
Non-CCaaS vendors are increasing competitive pressure on Nice Ltd.
NICE (NICE) vs. S&P 500 (SPY)
Market Cap
$9.01B
Dividend YieldN/A
Average Volume (3M)818.81K
Price to Earnings (P/E)20.8
Beta (1Y)1.64
Revenue Growth15.05%
EPS Growth31.05%
CountryUS
Employees8,384
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)6.76
Shares Outstanding62,869,100
10 Day Avg. Volume838,192
30 Day Avg. Volume818,812
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$212.15Price Target Upside50.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
NICE Business Overview & Revenue Model
Company DescriptionNICE Ltd. engages in the provision of enterprise software solutions and services. It operates through the following segments: Customer Interactions Solutions, Security Solutions, and Financial Crime and Compliance Solutions. The Customer Interactions Solutions segment provides suites such as compliance and risk, workforce optimization, operational efficiency, customer experience, and sales and retention. The Security Solutions segment offers suites including incident debriefing and investigation; public safety emergency response optimization; video surveillance and analytics; situation management; and intelligence and law enforcement. The Financial Crime and Compliance Solutions segment includes for enterprise risk management, anti-money laundering, fraud prevention, and brokerage compliance services. The company was founded on September 28, 1986 and is headquartered in Raanana, Israel.
How the Company Makes MoneyNICE Ltd. generates revenue through the sale of software licenses, subscriptions to its cloud-based solutions, and maintenance and support services. A significant portion of its earnings comes from its Software-as-a-Service (SaaS) offerings, which provide recurring subscription revenue streams. Additionally, the company earns from professional services such as consulting, implementation, and training. Strategic partnerships with major technology providers and a broad customer base across various industries, including financial services, healthcare, and government, also play a crucial role in driving NICE's revenue growth.
NICE Financial Statement Overview
Summary
NICE presents a strong financial profile characterized by robust revenue growth, healthy profitability margins, conservative leverage, and solid cash flow generation. The company's trajectory suggests continued success in the software industry, with a stable financial foundation and efficient operational performance. This positions NICE well for future growth and resilience against market fluctuations.Income Statement
NICE has demonstrated robust growth with a consistent increase in total revenue from $1.57 billion in 2019 to $2.74 billion in 2024, indicating a strong upward trajectory. The company maintains healthy margins, evidenced by a gross profit margin of 66.7% and a net profit margin of 16.2% in 2024. The EBIT and EBITDA margins are also strong, standing at 20.0% and 27.6% respectively. The revenue growth rate from 2023 to 2024 is 15.0%, showcasing effective market penetration and product demand.92
Very Positive
Balance Sheet
NICE exhibits a strong balance sheet with a debt-to-equity ratio of 0.16 in 2024, indicating low leverage and conservative financial management. The return on equity (ROE) is an impressive 12.3%, reflecting efficient use of shareholders' capital. The equity ratio is 67.8%, highlighting a solid equity base relative to total assets, suggesting financial stability and low risk.85
Very Positive
Cash Flow
NICE's cash flow is sound, with a significant increase in free cash flow from $312 million in 2019 to $798 million in 2024, resulting in a notable free cash flow growth. The operating cash flow to net income ratio is 1.88, indicating strong cash generation capability relative to earnings. The free cash flow to net income ratio is 1.80, further supporting efficient cash conversion and financial health.89
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.74B | 2.38B | 2.18B | 1.92B | 1.65B | Gross Profit |
| 1.83B | 1.61B | 1.50B | 1.30B | 1.09B | EBIT |
| 545.95M | 435.23M | 335.17M | 263.91M | 242.05M | EBITDA |
| 754.14M | 633.23M | 511.77M | 449.76M | 425.79M | Net Income Common Stockholders |
| 442.59M | 338.30M | 265.94M | 199.22M | 196.35M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.62B | 1.41B | 1.57B | 1.42B | 1.46B | Total Assets |
| 5.30B | 5.12B | 4.86B | 4.66B | 4.23B | Total Debt |
| 563.60M | 782.97M | 777.46M | 878.52M | 795.89M | Net Debt |
| 81.89M | 271.17M | 247.86M | 499.86M | 353.63M | Total Liabilities |
| 1.69B | 1.76B | 1.80B | 1.83B | 1.64B | Stockholders Equity |
| 3.59B | 3.34B | 3.04B | 2.83B | 2.56B |
| Cash Flow | Free Cash Flow | |||
| 797.68M | 477.25M | 397.82M | 394.61M | 417.02M | Operating Cash Flow |
| 832.64M | 561.43M | 479.71M | 461.82M | 480.31M | Investing Cash Flow |
| -397.40M | -293.58M | -152.35M | -261.50M | -465.07M | Financing Cash Flow |
| -456.60M | -290.27M | -164.50M | -261.82M | 196.84M |
NICE Technical Analysis
Negative
141.34
Price Trends
161.74
Negative
171.18
Negative
171.42
Negative
Market Momentum
-6.65
Positive
36.61
Neutral
32.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NICE, the sentiment is Negative. The current price of 141.34 is below the 20-day moving average (MA) of 152.99, below the 50-day MA of 161.74, and below the 200-day MA of 171.42, indicating a bearish trend. The MACD of -6.65 indicates Positive momentum. The RSI at 36.61 is Neutral, neither overbought nor oversold. The STOCH value of 32.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NICE.
NICE Risk Analysis
NICE disclosed 42 risk factors in its most recent earnings report. NICE reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NICE Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.85T | 30.87 | 34.29% | 0.82% | 15.04% | 12.38% | |
75 Outperform | $190.75B | 24.88 | 47.28% | ― | 10.65% | 44.84% | |
75 Outperform | $273.48B | 44.73 | 10.26% | 0.56% | 8.72% | 51.47% | |
74 Outperform | $240.53B | 26.49 | 20.02% | 2.65% | -5.34% | -30.57% | |
73 Outperform | $9.01B | 20.79 | 12.77% | ― | 15.05% | 31.05% | |
67 Neutral | $423.13B | 35.45 | 108.79% | 1.06% | 6.23% | 12.37% | |
58 Neutral | $21.67B | 10.04 | -18.58% | 2.39% | 5.01% | -23.17% |
* Technology Sector Average
Performance Comparison
NICE
NICE
141.34
-99.19
-41.24%
ADBE
Adobe
377.84
-192.61
-33.76%
CSCO
Cisco Systems
59.67
11.40
23.62%
MSFT
Microsoft
378.77
-43.23
-10.24%
ORCL
Oracle
147.66
23.47
18.90%
CRM
Salesforce
271.74
-30.29
-10.03%
NICE Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -20.82% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call showcased strong financial performance and growth in cloud revenue, underlined by leadership in AI with the CXone Mpower platform. However, challenges such as delayed revenue recognition, seasonality concerns, and flat cloud gross margins due to strategic investments present potential headwinds. The highlights of the call outweigh the lowlights, reflecting a positive outlook with some caution on operational challenges.Highlights
Record Cloud Revenue Growth
For Q4, cloud revenue grew 24% to $534 million, marking the highest cloud growth on the largest cloud revenue base in the industry. The cloud segment also saw a quarter-to-quarter growth acceleration of 6.8% from Q3 to Q4.
Strong Financial Performance
Operating income increased by 22% to $227 million, with an expansion in operating margin by 150 basis points to 31.5%. EPS surged by 28% compared to the same quarter last year, reaching $3.02 for Q4.
Exceptional Cash Flow
The company generated $250 million in operating cash flow in Q4, bringing the total to $833 million for 2024, a nearly 50% increase over the prior year.
AI Leadership with CXone Mpower
CXone Mpower platform is being rapidly adopted, with AI solutions included in 97% of large enterprise deals over $1 million ARR. It managed over 3.5 billion AI interactions annually.
Geographic Revenue Growth
The Americas region, representing 85% of total revenue in Q4, grew 17% year-over-year, while the EMEA and APAC regions also showed significant growth in cloud revenue.
Lowlights
Delayed Revenue Recognition
Large enterprise cloud deals are taking longer to fully ramp up and be recognized in revenue, which could lead to short-term delays in revenue recognition.
Seasonality Concerns
The company anticipates a lack of the same level of positive seasonality in the back half of the year as seen in Q4, potentially impacting revenue growth.
Cloud Gross Margin Impact
Cloud gross margin expected to remain flattish due to strategic investments in international expansion and scaling of the cloud business in the Financial Crime and Compliance segment.
Challenges in Deployment Times
Increasing large enterprise deals result in longer deployment times, impacting the revenue ramp-up and recognition.
Company Guidance
During the conference call discussing NICE's fourth quarter 2024 results, the company provided guidance for the first quarter and full year 2025. NICE expects total revenue for Q1 2025 to range between $693 million and $703 million, reflecting a year-over-year growth of 6% at the midpoint. The company also anticipates fully diluted EPS for the first quarter to be between $2.78 and $2.88, representing a 10% year-over-year growth at the midpoint. For the full year 2025, NICE projects total revenue to be between $2.918 billion and $2.938 billion, which corresponds to a 7% increase at the midpoint. Additionally, cloud revenue is expected to grow by 12% year-over-year, with the full year 2025 EPS anticipated to be in the range of $12.13 to $12.33, reflecting a 10% increase at the midpoint. The guidance considers factors such as anticipated moderate operating margin expansion and a tax rate ranging from 19% to 20% for 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.