NICE (NICE) AI Stock Analysis

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NICE

(NASDAQ:NICE)

Rating:84Outperform

Price Target:

$192.00

▲(9.45%Upside)

NICE's overall stock score is driven by strong financial performance and positive earnings call highlights, including growth in cloud revenue and strategic initiatives. Technical analysis indicates short-term strength, while the fair valuation suggests potential for growth. Challenges in service and product revenue and a slight decline in gross margin are notable, but the company's strategic direction and financial health provide a solid foundation for future success.

Positive Factors

Financial Performance

NICE reported cloud NRR of 111 for the first time and disclosed cloud and service ARR exceeds $200mn and grew 39% y/y.

Share Repurchase Program

Announces new $500 million share-repurchase program after record buyback in the quarter.

Strategic Partnerships

Management tone was constructive on large deal signings, strategic partnerships, and AI uptake.

Negative Factors

Cloud Revenue Performance

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

Enterprise Migrations

Some investors are concerned that enterprise migrations have slowed or stalled and competitive intensity is pressuring ARPU.

Revenue Guidance

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

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

Market Cap

$11.16B

Dividend YieldN/A

Average Volume (3M)392.34K

Price to Earnings (P/E)24.6

Beta (1Y)1.31

Revenue Growth12.62%

EPS Growth26.45%

CountryUS

Employees8,726

SectorTechnology

Sector Strength84

IndustrySoftware - Application

Share Statistics

EPS (TTM)2.87

Shares Outstanding63,249,844

10 Day Avg. Volume392,300

30 Day Avg. Volume392,337

Financial Highlights & Ratios

PEG Ratio6.77

Price to Book (P/B)3.11

Price to Sales (P/S)0.00

P/FCF Ratio15.19

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue1.08

Enterprise Value/Gross Profit6.14

Enterprise Value/Ebitda4.05

Forecast

1Y Price Target

$204.85

Price Target Upside16.78% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

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 primarily through the sale of software licenses, subscriptions, and related services. The company's key revenue streams include cloud-based solutions, which are offered via subscription models, and on-premises software licenses, which typically involve upfront payments and ongoing maintenance fees. Additionally, NICE provides professional services such as consulting, training, and implementation support, which contribute to its revenue. Significant partnerships with technology firms and system integrators enhance its market reach and sales potential. The company's focus on innovation in artificial intelligence and analytics drives demand for its solutions, providing a competitive edge in its core sectors.

NICE Earnings Call Summary

Earnings Call Date:May 15, 2025

(Q1-2025)

% Change Since: 3.52%|

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.

NICE Financial Statement Overview

Summary

NICE presents a strong financial profile with robust revenue growth, healthy profitability margins, and solid cash flow generation. The company has a revenue growth rate of 15% from 2023 to 2024, high profit margins, and a significant increase in free cash flow, positioning it well for future growth.

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

Positive

Last Price175.42

Price Trends

50DMA

158.97

Positive

100DMA

159.00

Positive

200DMA

166.85

Positive

Market Momentum

MACD

4.43

Negative

RSI

64.92

Neutral

STOCH

86.20

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NICE, the sentiment is Positive. The current price of 175.42 is above the 20-day moving average (MA) of 167.24, above the 50-day MA of 158.97, and above the 200-day MA of 166.85, indicating a bullish trend. The MACD of 4.43 indicates Negative momentum. The RSI at 64.92 is Neutral, neither overbought nor oversold. The STOCH value of 86.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NICE	84 Outperform	$11.16B	24.65	13.40%	―	12.62%	26.45%
BSY	81 Outperform	$15.09B	63.25	25.20%	0.50%	10.71%	-27.64%
MANH	80 Outperform	$11.70B	54.95	89.60%	―	9.18%	14.35%
APPF	77 Outperform	$7.83B	40.70	49.11%	―	22.73%	154.79%
U	73 Outperform	$10.45B	―	-14.15%	―	-16.74%	49.75%
PCTY	71 Outperform	$10.73B	46.41	19.70%	―	14.63%	17.15%
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%

* Technology Sector Average

Performance Comparison

NICE

175.42

0.34

0.19%

MANH

Manhattan Associates

193.65

-27.58

-12.47%

PCTY

Paylocity

186.12

46.58

33.38%

APPF

AppFolio

217.95

-13.35

-5.77%

Unity Software

24.69

6.72

37.40%

BSY

Bentley Systems

47.79

-0.89

-1.83%

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.