NICE (NICE) AI Stock Analysis

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NICE

(NASDAQ:NICE)

83Outperform

NICE's strong financial performance, highlighted by solid revenue and cash flow growth, underpins its resilience and future growth potential. While technical analysis indicates a neutral stance, the company's fair valuation and positive earnings guidance contribute to a favorable outlook. Despite some operational challenges, the overall sentiment remains positive, reflecting a well-balanced opportunity for investors.

Positive Factors

AI Adoption

Bullish tone on the earnings call and positive traction with AI adoption, large deals, and improved execution.

Earnings

Q4 revenue and EPS came in above consensus driven by Product revenue.

Partnerships

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

NICE reported disappointing results; although total revenue beat expectations, the more important cloud revenue line missed slightly for the third quarter in a row.

Cloud Revenue Guidance

The 2025 Cloud revenue guidance of 12% Y/Y was meaningfully lower than expected and drove shares down 14%.

Revenue Growth

Full-year revenue guidance also disappointed as NICE called for about 7% total revenue growth, below expectations of nearly 10%.

NICE (NICE) vs. S&P 500 (SPY)

Market Cap

$10.63B

Dividend YieldN/A

Average Volume (3M)343.27K

Price to Earnings (P/E)23.8

Beta (1Y)1.42

Revenue Growth12.62%

EPS Growth26.45%

CountryUS

Employees8,726

SectorTechnology

Sector Strength82

IndustrySoftware - Application

Share Statistics

EPS (TTM)2.87

Shares Outstanding63,249,844

10 Day Avg. Volume306,075

30 Day Avg. Volume343,269

Financial Highlights & Ratios

PEG Ratio6.34

Price to Book (P/B)2.92

Price to Sales (P/S)0.00

P/FCF Ratio14.19

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue1.01

Enterprise Value/Gross Profit5.74

Enterprise Value/Ebitda3.79

Forecast

1Y Price Target

$203.79

Price Target Upside26.49% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering15

NICE Business Overview & Revenue Model

Company DescriptionNICE Ltd., together with its subsidiaries, provides cloud platforms for AI-driven digital business solutions worldwide. It offers CXone, a cloud native open platform that supports contact centers ranging from small single sites to distributed remote agents and enterprises; Enlighten, an AI engine for CX that discovers automation opportunities for self-service; digital-entry points solutions that enable organizations to address consumers' needs; and journey orchestration solutions that empower organizations to connect and route customers to deal with the customer's request, and connecting them using real time AI-based routing. The company also provides smart self service solutions that empower organizations to build intelligent automated conversations based on data; and prepared agent solutions and tools enable contact center agents to guide and alert them in real time so they can provide resolutions; complete performance solutions that help organizations to record structured and unstructured customer interaction and transaction data; and NICE Evidencentral, an digital evidence management platform for public safety emergency communications, law enforcement, and criminal justice helps agencies. In addition, it offers X-Sight, is an open and flexible AI-cloud platform for financial crime and compliance; Xceed, a cloud platform for comprehensive AML and fraud prevention for small and mid-sized organizations; data intelligence solutions that enable organizations to turn raw data into comprehensive actionable intelligence to prevent and detect financial crimes; AI and analytics technologies to detect and prevent financial crimes in real-time; money laundering and fraud prevention solutions that help organizations adhere to capital markets compliance and anti-money laundering compliance regulations; intelligent investigations solutions; and self-service solutions that provide organizations with customization and self-development capabilities. The company was formerly known as NICE-Systems Ltd. and changed its name to NICE Ltd. in June 2016. NICE Ltd. was founded in 1986 and is based in Ra'anana, 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.

Income Statement

Very Positive

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.

Balance Sheet

Very Positive

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.

Cash Flow

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Neutral

Last Price161.11

Price Trends

50DMA

153.52

Positive

100DMA

159.45

Positive

200DMA

167.12

Negative

Market Momentum

MACD

3.42

Negative

RSI

54.25

Neutral

STOCH

73.30

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NICE, the sentiment is Neutral. The current price of 161.11 is above the 20-day moving average (MA) of 157.43, above the 50-day MA of 153.52, and below the 200-day MA of 167.12, indicating a neutral trend. The MACD of 3.42 indicates Negative momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 73.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NICE	83 Outperform	$10.63B	23.84	13.40%	―	12.62%	26.45%
BSY	80 Outperform	$14.55B	60.96	25.20%	0.52%	10.71%	-27.64%
PCTY	78 Outperform	$11.00B	49.74	19.70%	―	14.63%	17.15%
APPF	72 Outperform	$7.64B	39.67	49.11%	―	22.73%	154.79%
U	72 Outperform	$9.12B	―	-14.15%	―	-16.74%	49.75%
MANH	71 Outperform	$11.79B	55.05	89.60%	―	9.18%	14.35%
Sector *	60 Neutral	$11.64B	10.63	-6.94%	2.93%	7.63%	-11.15%

* Technology Sector Average

Performance Comparison

NICE

161.11

-32.44

-16.76%

MANH

Manhattan Associates

193.10

-35.68

-15.60%

PCTY

Paylocity

199.21

26.24

15.17%

APPF

AppFolio

212.43

-28.16

-11.70%

Unity Software

21.22

-0.45

-2.08%

BSY

Bentley Systems

48.23

-7.93

-14.12%

NICE Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q1-2025)

% Change Since: -4.93%|

Next Earnings Date:Aug 14, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant growth in cloud revenues and strategic partnerships, alongside record-breaking share buybacks and major government contracts. However, there are challenges with declining service and product revenues and a slight decline in overall gross margin.

Q1-2025 Updates

Positive Updates

Strong Cloud Revenue Growth

Cloud revenue rose 12% year on year to $527 million, now representing 75% of total revenue. The growth was driven by the adoption of the CXone Mpower platform.

Record Share Buyback

Executed the largest quarterly share repurchase in the company's history totaling $252 million, demonstrating confidence in the long-term strategy.

Major Government Contracts

Signed a $100 million contract with a major European government agency, marking the second nine-figure government deal in less than a year.

New Strategic Partnerships

Announced new partnerships with ServiceNow and AWS, enhancing the integration of AI, automation, and cloud services.

Expansion into International Markets

50% of international revenue now comes from cloud solutions, reflecting strong global growth and cloud adoption.

Introduction of New Cloud Metrics

Introduced CapEx-AI and self-service cloud revenue metrics, with annual recurring revenue exceeding $200 million, growing 39% year over year.

Negative Updates

Slight Decline in Overall Gross Margin

Total gross margin declined slightly to 69.9% from 70.9% last year, primarily due to a decrease in higher margin on-premise revenue.

Challenges in Service and Product Revenue

Service revenue declined by 6% and product revenue by 20% as the shift to cloud continues.

Premise-Based Revenue Decline

Premise-based revenues continue to decline as the company prioritizes cloud-first solutions.

Company Guidance

During the call, NICE provided detailed guidance for the second quarter and full year 2025, projecting total revenue between $709 million and $719 million for Q2, representing a 7% year-over-year growth at the midpoint. For the full year, NICE reaffirmed its total revenue guidance, expected to be between $2.918 billion and $2.938 billion, also reflecting a 7% growth at the midpoint. The company anticipates a non-GAAP operating margin increase of approximately 50 basis points year-over-year. Adjusted earnings per share for Q2 are forecasted to range from $2.93 to $3.03, indicating a 13% year-over-year growth at the midpoint. For the full year, the EPS guidance was raised to a range of $12.28 to $12.48, marking an 11% increase at the midpoint. This guidance was underpinned by strong performance in cloud revenue, which grew by 12% year-over-year in Q1, and a robust cash flow from operations, which reached $285 million, up 12% from the previous year.

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.