Should Investors Reconsider NICE After 43% Slide and Mixed Industry Sentiment in 2025?

• Curious if NICE’s current stock price is a bargain or a red flag? Here is a closer look at why its value story deserves attention.
• Shares have experienced significant volatility recently, dropping 13.9% over the last week and 18.9% over the past month, with a substantial 43.0% decline year-to-date.
• These sharp moves come as investors respond to mixed sentiment from sector-wide headlines and broader market volatility. Recent regulatory shifts and changing technology adoption trends have added to speculation about NICE’s long-term position and risk profile.
• The company currently holds a valuation score of 4 out of 6, reflecting both strengths and areas that may require closer scrutiny. The following sections unpack various valuation methods, with an additional perspective on assessing NICE’s true worth.

Find out why NICE's -45.6% return over the last year is lagging behind its peers.

Approach 1: NICE Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is one of the most widely used approaches for valuing a company. It works by predicting the company’s future cash flows and then discounting them back to their present value to estimate what the business is truly worth today.

For NICE, the DCF model starts with its latest reported Free Cash Flow (FCF) of $684.36 Million. Based on a mix of analyst estimates and future extrapolations, FCF is projected to steadily climb over the coming decade, potentially reaching as high as $2.05 Billion by 2035. According to analysts, FCF is expected to surpass $1.2 Billion within the next five years.

Utilizing these projections, the DCF analysis calculates an estimated intrinsic value of $974.92 per share. Compared to NICE’s current share price, this suggests a significant discount. The model implies the stock is 63.5% undervalued at present levels.

In summary, NICE’s DCF valuation points to a substantial margin of safety and a potential opportunity for long-term investors comfortable with volatility and forecasting risks.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests NICE is undervalued by 63.5%. Track this in your watchlist or portfolio, or discover 905 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for NICE.

Approach 2: NICE Price vs Earnings

Using the Price-to-Earnings (PE) ratio is a widely accepted way to value profitable companies, as it directly links a company’s share price to its earnings. This metric is especially useful for businesses like NICE that consistently generate profits, enabling investors to quickly gauge how the market values their bottom line relative to competitors and the broader sector.

Expectations for a company’s growth and its perceived risk both influence what constitutes a “normal” or “fair” PE ratio. Higher growth prospects and lower risk generally justify a higher PE. Stagnant growth or elevated business risks often lead to a lower ratio. These benchmarks help provide essential context when evaluating a company's valuation.

At present, NICE trades at 12.0x earnings. This is well below the software industry average of 26.9x and the average of its direct peers at 46.1x. However, Simply Wall St’s proprietary “Fair Ratio” for NICE stands at 11.8x. The Fair Ratio is calculated based on elements like the company’s growth outlook, profit margins, market capitalization, industry trends, and risk factors, making it a more tailored benchmark than the generic industry or peer averages.

Because the Fair Ratio incorporates company-specific strengths and challenges, rather than broad comparisons, investors can be more confident in its indication of intrinsic value. With NICE’s PE almost identical to its Fair Ratio (a difference of less than 0.1x), the stock currently appears to be valued about right based on its earnings profile.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1418 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your NICE Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your story about a company, connecting your outlook such as your fair value, revenue and earnings predictions, and why you believe those numbers to a share price that makes sense to you.

This approach helps you link NICE’s business fundamentals and future prospects to a concrete financial forecast, then calculate what you think the shares should be worth. Narratives are available as easy, guided tools on Simply Wall St’s Community page, empowering millions of investors to frame their perspectives and follow others’ as well.

By comparing the Fair Value you have set to the current market Price, Narratives help you decide if, and when, NICE might be a buy or a sell for you. These insights update dynamically whenever new company news, earnings, or events are released, ensuring that your Narrative and valuation adapt in real time.

For example, one investor might create a Narrative forecasting high AI cloud growth and set a fair value near ₪750 per share, while another, more cautious user factoring in regulatory and margin risks might arrive at a value closer to ₪460 instead.

Do you think there's more to the story for NICE? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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