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CRNC

CerenceNasdaqGS:CRNC Stock Report

Market Cap

US$3.0b

7D

-25.9%

1Y

-14.9%

Updated

26 Nov, 2021

Data

Company Financials +
CRNC fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance2/6
Financial Health4/6
Dividends0/6

CRNC Stock Overview

Cerence Inc. provides AI powered virtual assistants for the mobility/transportation market worldwide.

Cerence Competitors

Apple

NasdaqGS:AAPL

US$2.6t

Microsoft

NasdaqGS:MSFT

US$2.5t

Amazon.com

NasdaqGS:AMZN

US$1.8t

Tencent Holdings

SEHK:700

HK$4.4t

Price History & Performance

Summary of all time highs, changes and price drops for Cerence
Historical stock prices
Current Share PriceUS$77.07
52 Week HighUS$139.00
52 Week LowUS$74.10
Beta2.51
1 Month Change-21.49%
3 Month Change-31.83%
1 Year Change-14.93%
3 Year Changen/a
5 Year Changen/a
Change since IPO402.09%

Recent News & Updates

Nov 01
These 4 Measures Indicate That Cerence (NASDAQ:CRNC) Is Using Debt Safely

These 4 Measures Indicate That Cerence (NASDAQ:CRNC) Is Using Debt Safely

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

CRNCUS SoftwareUS Market
7D-25.9%-4.9%-2.7%
1Y-14.9%33.7%21.3%

Return vs Industry: CRNC underperformed the US Software industry which returned 33.7% over the past year.

Return vs Market: CRNC underperformed the US Market which returned 21.3% over the past year.

Price Volatility

Is CRNC's price volatile compared to industry and market?
CRNC volatility
CRNC Average Weekly Movement8.3%
Software Industry Average Movement7.4%
Market Average Movement5.9%
10% most volatile stocks in US Market15.1%
10% least volatile stocks in US Market2.2%

Stable Share Price: CRNC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: CRNC's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
n/a1,700Sanjay Dhawanhttps://www.cerence.com

Cerence Inc. provides AI powered virtual assistants for the mobility/transportation market worldwide. The company offers edge software components; cloud-connected components and related toolkits and applications; and virtual assistant coexistence and professional services. It also provides conversational artificial intelligence-based solutions, including speech recognition, natural language understanding, speech signal enhancement, text-to-speech, and acoustic modeling technology.

Cerence Fundamentals Summary

How do Cerence's earnings and revenue compare to its market cap?
CRNC fundamental statistics
Market CapUS$2.97b
Earnings (TTM)US$45.89m
Revenue (TTM)US$387.18m

64.7x

P/E Ratio

7.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CRNC income statement (TTM)
RevenueUS$387.18m
Cost of RevenueUS$93.56m
Gross ProfitUS$293.62m
ExpensesUS$247.73m
EarningsUS$45.89m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.19
Gross Margin75.84%
Net Profit Margin11.85%
Debt/Equity Ratio26.3%

How did CRNC perform over the long term?

See historical performance and comparison

Valuation

Is Cerence undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CRNC ($77.07) is trading below our estimate of fair value ($162.76)

Significantly Below Fair Value: CRNC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CRNC is poor value based on its PE Ratio (64.7x) compared to the US Software industry average (43.6x).

PE vs Market: CRNC is poor value based on its PE Ratio (64.7x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: CRNC is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: CRNC is good value based on its PB Ratio (2.9x) compared to the US Software industry average (6.4x).


Future Growth

How is Cerence forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

29.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CRNC's forecast earnings growth (29.4% per year) is above the savings rate (2%).

Earnings vs Market: CRNC's earnings (29.4% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CRNC's revenue (18% per year) is forecast to grow faster than the US market (10.1% per year).

High Growth Revenue: CRNC's revenue (18% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CRNC's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Cerence performed over the past 5 years?

-1.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CRNC has high quality earnings.

Growing Profit Margin: CRNC became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CRNC's earnings have declined by 1.3% per year over the past 5 years.

Accelerating Growth: CRNC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CRNC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Software industry (20.5%).


Return on Equity

High ROE: CRNC's Return on Equity (4.4%) is considered low.


Financial Health

How is Cerence's financial position?


Financial Position Analysis

Short Term Liabilities: CRNC's short term assets ($287.0M) exceed its short term liabilities ($165.3M).

Long Term Liabilities: CRNC's short term assets ($287.0M) do not cover its long term liabilities ($508.5M).


Debt to Equity History and Analysis

Debt Level: CRNC's net debt to equity ratio (10.7%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if CRNC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CRNC's debt is well covered by operating cash flow (27.4%).

Interest Coverage: CRNC's interest payments on its debt are well covered by EBIT (4.7x coverage).


Balance Sheet


Dividend

What is Cerence current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate CRNC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CRNC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CRNC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CRNC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CRNC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Sanjay Dhawan (57 yo)

2.08yrs

Tenure

US$12,925,891

Compensation

Mr. Sanjay Dhawan is the Chief Executive Officer at Cerence Inc. since October 1, 2019. He is also the Director at Cerence Inc. since October 2019. He has been the President of Connected Services Division...


CEO Compensation Analysis

Compensation vs Market: Sanjay's total compensation ($USD12.93M) is above average for companies of similar size in the US market ($USD5.20M).

Compensation vs Earnings: Sanjay's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: CRNC's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: CRNC's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CRNC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3%.


Top Shareholders

Company Information

Cerence Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Cerence Inc.
  • Ticker: CRNC
  • Exchange: NasdaqGS
  • Founded: NaN
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$2.970b
  • Shares outstanding: 38.54m
  • Website: https://www.cerence.com

Number of Employees


Location

  • Cerence Inc.
  • 15 Wayside Road
  • Burlington
  • Massachusetts
  • 1803
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/11/26 23:06
End of Day Share Price2021/11/26 00:00
Earnings2021/09/30
Annual Earnings2021/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.