Nuance Communications: While We Are Becoming More Optimistic, FY15 Numbers Could Be Adjusted Lower, Says Wedbush

In a research report sent to investors today, Wedbush analyst Shyam Patil reiterated a Neutral rating on Nuance Communications (NASDAQ:NUAN) with a price target of $16, which represents a slight upside potential from current levels.

Patil noted, “As Nuance’s business model continues to transition toward ratablyrecognized recurring revenue, we are more convinced that the key metrics to gauge business performance are bookings, recurring revenue and cash flow. We would note that while revenue and earnings estimates have come down throughout the year, the key metrics have generally been healthy. Moreover, we sense that investors are also starting to shift toward evaluating Nuance on these metrics, though it may take the market a few more quarters to move away from primarily focusing on revenue and earnings.”

The analyst continued, “In our opinion, shifting investor focus and continued execution on these key metrics are likely the main catalysts for the stock. While we are becoming more optimistic, we are maintaining our NEUTRAL, as we believe FY15 numbers could be adjusted lower and would like further confirmation that the underlying fundamentals remain healthy.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Shyam Patil has a total average return of 4.6% and a 56.3% success rate. Patil has a -27.8% average return when recommending NUAN, and is ranked #1509 out of 3377 analysts.

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