In a report released today, Jeff Osborne from TD Cowen maintained a Buy rating on Cerence (CRNC – Research Report), with a price target of $23.00.
Jeff Osborne’s assessment for a Buy rating on Cerence’s stock is influenced by a confluence of constructive factors. The company’s fourth-quarter earnings surpassed expectations, presenting a robust financial performance that exceeded both revenue and profitability forecasts. Moreover, Cerence’s guidance for the first quarter and full-year of fiscal 2024 suggests a continuation of this positive trend, with projections notably higher than current market consensus.
Underpinning this optimism is Cerence’s demonstrated ability to grow its market presence, as evidenced by a significant year-over-year increase in the number of connected cars using its technology, outpacing global auto production growth. Additionally, the company’s shift towards a more focused strategy, emphasizing generative AI in core automotive applications, along with a reduction in annual fixed contract revenue, is seen as a move towards a clearer and more scalable business model. Despite some concerns related to a one-time revenue boost from the early termination of a legacy contract and a conservative medium-term revenue outlook, the fundamental demand indicators and strategic realignment are deemed to overshadow these issues, justifying the Buy rating.
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Cerence (CRNC) Company Description:
Cerence, Inc. builds automotive cognitive assistance solutions to power natural and intuitive interactions between automobiles, drivers and passengers, and the broader digital world. It also engages in the sale of software licenses and cloud-connected services. The company was founded on February 14, 2019 and is headquartered in Burlington, MA.
Read More on CRNC:
- Cerence (NASDAQ:CRNC) Gains on Strong Q4 Revenue Growth
- Cerence Announces Fourth Quarter and Fiscal Year 2023 Results
- Options Volatility and Implied Earnings Moves Today, November 27, 2023
- Is CRNC a Buy, Before Earnings?
- Cerence to Announce Fiscal Fourth Quarter and Full Year Results on November 27, 2023
