NICE (NICE) AI Stock Analysis

• Market Cap: $8.75B
• Dividend Yield: N/A
• Average Volume (3M): 810.73K
• Price to Earnings (P/E): 16.3
• Beta (1Y): 1.27
• Revenue Growth: 11.72%
• EPS Growth: 37.05%
• Country: US
• Employees: 8,726
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 3.01
• Shares Outstanding: 61,741,703
• 10 Day Avg. Volume: 775,472
• 30 Day Avg. Volume: 810,729
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 3.38
• Enterprise Value/Gross Profit: 5.04
• Enterprise Value/Ebitda: 12.11
• 1Y Price Target: $195.58
• Price Target Upside: 41.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 70 Outperform
• Price Target: $152.00 ▲(9.61% Upside)

NICE's overall stock score reflects strong financial performance and positive earnings call insights, particularly in AI and international markets. However, technical analysis indicates bearish momentum, which could pose short-term challenges. The valuation is reasonable, but the lack of a dividend yield may limit appeal to certain investors. Continued focus on addressing cloud margin issues and LiveVox performance will be important for future growth.

Positive Factors

AI and Cloud Strategy

NICE is well positioned longer term to benefit from AI adoption in the contact center and the tailwind from cloud migrations in the CCaaS market.

Earnings

NICE reported good second-quarter results with revenue beating the midpoint of prior guidance by 2% and EPS by 1%.

Strategic Acquisitions

The acquisition of Cognigy is seen as a strategic move to enhance NICE's AI capabilities and accelerate its research and development initiatives.

Negative Factors

Financial Performance

Adjusted gross margins were below expectations this quarter at 69.3% vs. consensus of 70.7%.

Investor Concerns

NICE shares are down 19% YTD vs. the Nasdaq +13, reflecting investors' broad concerns about AI disruption.

Stock Performance

The stock is down 14% on the print, as investors had higher hopes for the Cloud segment.

NICE Business Overview & Revenue Model

Company Description

NICE 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 Money

NICE generates revenue through a diversified model that includes software licensing, subscription services, and professional services. The company offers a range of products under its NICE CXone platform, which provides cloud-based customer engagement solutions, primarily on a subscription basis, allowing for recurring revenue streams. Additionally, NICE earns from software licenses for on-premises installations and from professional services that include implementation, training, and consulting. Significant partnerships with cloud service providers and integrations with leading CRM systems enhance their market reach and contribute to revenue growth. Furthermore, NICE has been actively expanding its product offerings and entering new markets, which supports its earnings potential.

NICE Financial Statement Overview

Summary

NICE demonstrates strong financial performance with excellent profitability and operational efficiency. The company maintains a solid balance sheet with conservative leverage and a strong equity position. Cash flow generation is robust, although slightly declining, yet indicates sufficient liquidity. Overall, NICE is well-positioned for sustainable growth and financial stability.

Income Statement

NICE demonstrates strong profitability with a consistent increase in revenue over the years. The TTM gross profit margin stands at 66.88% and net profit margin at 16.77%, indicating efficient cost management and robust profitability. The revenue growth rate from the last annual report to the TTM is healthy at 1.49%. The EBIT and EBITDA margins are also strong at 20.62% and 27.73%, respectively, signaling excellent operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.15 in the TTM, indicating conservative leverage and financial stability. The return on equity (ROE) is 13.30%, showcasing effective use of equity to generate profits. The equity ratio stands at 66.89%, highlighting a strong equity base relative to assets.

Cash Flow

NICE's cash flow statement reveals a robust free cash flow with a TTM growth rate of -3.54%, which is slightly negative but indicates resilience. The operating cash flow to net income ratio is 1.85, and free cash flow to net income ratio is 1.65, both suggesting strong cash generation capabilities relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.84B	2.74B	2.38B	2.18B	1.92B	1.65B
Gross Profit	1.90B	1.83B	1.61B	1.50B	1.30B	1.09B
EBITDA	791.63M	754.14M	633.23M	511.77M	449.76M	425.79M
Net Income	537.12M	442.59M	338.30M	265.94M	199.22M	196.35M
Balance Sheet
Total Assets	5.31B	5.30B	5.12B	4.86B	4.66B	4.23B
Cash, Cash Equivalents and Short-Term Investments	1.63B	1.62B	1.41B	1.57B	1.42B	1.46B
Total Debt	539.03M	563.60M	782.97M	777.46M	878.52M	795.89M
Total Liabilities	1.58B	1.69B	1.76B	1.80B	1.83B	1.64B
Stockholders Equity	3.73B	3.59B	3.34B	3.04B	2.83B	2.56B
Cash Flow
Free Cash Flow	660.11M	797.68M	477.25M	397.82M	394.61M	417.02M
Operating Cash Flow	754.88M	832.64M	561.43M	479.71M	461.82M	480.31M
Investing Cash Flow	-499.25M	-397.40M	-293.58M	-152.35M	-261.50M	-465.07M
Financing Cash Flow	-463.36M	-456.60M	-290.27M	-164.50M	-261.82M	196.84M

NICE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 138.67
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NICE, the sentiment is Negative. The current price of 138.67 is below the 20-day moving average (MA) of 140.11, below the 50-day MA of 152.72, and below the 200-day MA of 161.63, indicating a bearish trend. The MACD of -4.04 indicates Negative momentum. The RSI at 42.83 is Neutral, neither overbought nor oversold. The STOCH value of 30.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NICE.

NICE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVLT	73 Outperform	$7.95B	99.80	25.08%	―	21.62%	-53.99%
PEGA	71 Outperform	$9.21B	46.60	41.55%	0.14%	12.47%	65.19%
NICE	70 Outperform	$8.75B	16.26	15.07%	―	11.72%	37.05%
ESTC	68 Neutral	$9.00B	192.75	-9.65%	―	17.42%	-228.98%
MNDY	68 Neutral	$9.26B	246.11	3.80%	―	30.24%	-6.69%
GTLB	62 Neutral	$7.18B	470.51	-0.63%	―	28.97%	98.96%
Sector *	61 Neutral	$35.51B	8.11	-11.05%	1.89%	8.55%	-8.72%