Deutsche Bank On Nuance Communications: Nice Finish To Fiscal 2014

Courtesy of Benzinga.

Nuance Communications Inc. (NASDAQ: NUAN) reported a modest beat in its fourth-quarter results on Monday. The company earned $0.33 per share, topping expectations of $0.27 per share while revenue of $502.3 million was lower than the $511 million analysts expected.

Nuance Communications guided its fiscal 2015 revenue to a range of $2.02 billion to $2.08 billion and earnings per share of $1.10 to $1.20 vs. a consensus estimate of $2.07 billion and $1.15 per share, respectively.

Nandan Amladi of Deutsche Bank commented on Tuesday that the company's results and guidance provide more visibility on future revenue growth.

The analyst notes that the fourth-quarter results were better than expected due a typical bump in licenses while bookings conversation also contributed.

"Commentary around bookings in Healthcare, Enterprise and Automotive remains bullish, while Mobile struggles but have easy compares next year," Amladi wrote. The analyst added that fiscal 2015 revenue guidance incorporates 3 percent growth at midpoint and "embeds a continuing transition" where bookings growth will outpace revenue growth.

Amladi adds that as profitability improved across the company's segments and "as the flywheel of recurring revenue builds," investors should see margin improvements as well heading in to 2015.

Shares are Buy rated with a $25 price target.

Shares recently traded at $15.92, up 4 percent.

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