CERENCE INC (CRNC) Stock Fundamental Analysis
NASDAQ:CRNC - Nasdaq - US1567271093 - Common Stock
We assign a fundamental rating of 3 out of 10 to CRNC. CRNC was compared to 285 industry peers in the Software industry. There are concerns on the financial health of CRNC while its profitability can be described as average. CRNC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year CRNC was profitable.
CRNC had a positive operating cash flow in the past year.
In the past 5 years CRNC reported 4 times negative net income.
CRNC had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -83.73%, CRNC is doing worse than 89.25% of the companies in the same industry.
Looking at the Return On Equity, with a value of -416.79%, CRNC is doing worse than 86.38% of the companies in the same industry.
With an excellent Return On Invested Capital value of 7.54%, CRNC belongs to the best of the industry, outperforming 81.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -83.73% | ||
| ROE | -416.79% | ||
| ROIC | 7.54% |
ROA(3y)-37.21%
ROA(5y)-22.01%
ROE(3y)-156.16%
ROE(5y)-93.19%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
CRNC has a Operating Margin of 13.97%. This is amongst the best in the industry. CRNC outperforms 82.44% of its industry peers.
In the last couple of years the Operating Margin of CRNC has grown nicely.
The Gross Margin of CRNC (73.69%) is better than 62.01% of its industry peers.
In the last couple of years the Gross Margin of CRNC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.97% | ||
| PM (TTM) | N/A | ||
| GM | 73.69% |
OM growth 3Y-6.27%
OM growth 5Y3.2%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.09%
GM growth 5Y1.84%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CRNC is destroying value.
CRNC has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, CRNC has more shares outstanding
CRNC has a worse debt/assets ratio than last year.
2.2 Solvency
CRNC has an Altman-Z score of -0.49. This is a bad value and indicates that CRNC is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of CRNC (-0.49) is worse than 74.55% of its industry peers.
CRNC has a debt to FCF ratio of 23.14. This is a negative value and a sign of low solvency as CRNC would need 23.14 years to pay back of all of its debts.
CRNC has a Debt to FCF ratio of 23.14. This is comparable to the rest of the industry: CRNC outperforms 45.52% of its industry peers.
CRNC has a Debt/Equity ratio of 1.38. This is a high value indicating a heavy dependency on external financing.
CRNC's Debt to Equity ratio of 1.38 is on the low side compared to the rest of the industry. CRNC is outperformed by 81.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.38 | ||
| Debt/FCF | 23.14 | ||
| Altman-Z | -0.49 |
ROIC/WACC0.77
WACC9.8%
2.3 Liquidity
A Current Ratio of 1.22 indicates that CRNC should not have too much problems paying its short term obligations.
CRNC has a Current ratio of 1.22. This is in the lower half of the industry: CRNC underperforms 64.87% of its industry peers.
A Quick Ratio of 1.22 indicates that CRNC should not have too much problems paying its short term obligations.
CRNC has a worse Quick ratio (1.22) than 64.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 210.81% over the past year.
The earnings per share for CRNC have been decreasing by -23.41% on average. This is quite bad
The Revenue has grown by 12.57% in the past year. This is quite good.
The Revenue has been growing slightly by 1.79% on average over the past years.
EPS 1Y (TTM)210.81%
EPS 3Y-23.41%
EPS 5YN/A
EPS Q2Q%-177.78%
Revenue 1Y (TTM)12.57%
Revenue growth 3Y-5.05%
Revenue growth 5Y1.79%
Sales Q2Q%-32.17%
3.2 Future
CRNC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 26.55% yearly.
The Revenue is expected to grow by 2.46% on average over the next years.
EPS Next Y-100.68%
EPS Next 2Y-44.59%
EPS Next 3Y-10.81%
EPS Next 5Y26.55%
Revenue Next Year-24.56%
Revenue Next 2Y-7.53%
Revenue Next 3Y2.46%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.88, the valuation of CRNC can be described as reasonable.
Based on the Price/Earnings ratio, CRNC is valued cheaply inside the industry as 92.11% of the companies are valued more expensively.
CRNC is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
CRNC is expected to report negative earnings next year, which makes the Forward Price/Earnings Ratio negative.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.88 | ||
| Fwd PE | N/A |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRNC is valued cheaply inside the industry as 91.04% of the companies are valued more expensively.
CRNC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CRNC is cheaper than 67.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.96 | ||
| EV/EBITDA | 12.09 |
4.3 Compensation for Growth
A cheap valuation may be justified as CRNC's earnings are expected to decrease with -10.81% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-44.59%
EPS Next 3Y-10.81%
5. Dividend
5.1 Amount
CRNC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CERENCE INC
NASDAQ:CRNC (1/21/2025, 8:00:00 PM)
After market: 13.8999 +0.24 (+1.76%)13.66
+1.08 (+8.59%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.51%
Inst Owner Change0.03%
Ins Owners2.15%
Ins Owner Change42.08%
Market Cap585.06M
Analysts72.31
Price Target7.14 (-47.73%)
Short Float %17.64%
Short Ratio0.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)194.34%
Min EPS beat(2)81.16%
Max EPS beat(2)307.51%
EPS beat(4)4
Avg EPS beat(4)117.64%
Min EPS beat(4)22.04%
Max EPS beat(4)307.51%
EPS beat(8)7
Avg EPS beat(8)107.29%
EPS beat(12)9
Avg EPS beat(12)75.54%
EPS beat(16)13
Avg EPS beat(16)60.99%
Revenue beat(2)2
Avg Revenue beat(2)6.88%
Min Revenue beat(2)1%
Max Revenue beat(2)12.76%
Revenue beat(4)4
Avg Revenue beat(4)6.05%
Min Revenue beat(4)1%
Max Revenue beat(4)12.76%
Revenue beat(8)7
Avg Revenue beat(8)5.06%
Revenue beat(12)8
Avg Revenue beat(12)2.95%
Revenue beat(16)10
Avg Revenue beat(16)2.53%
PT rev (1m)0%
PT rev (3m)36.36%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-343.34%
EPS NY rev (1m)0%
EPS NY rev (3m)88.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-18.21%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.88 | ||
| Fwd PE | N/A | ||
| P/S | 1.76 | ||
| P/FCF | 47.96 | ||
| P/OCF | 34.02 | ||
| P/B | 4.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.09 |
EPS(TTM)1.15
EY8.42%
EPS(NY)-0.01
Fwd EYN/A
FCF(TTM)0.28
FCFY2.09%
OCF(TTM)0.4
OCFY2.94%
SpS7.74
BVpS3.29
TBVpS-3.68
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -83.73% | ||
| ROE | -416.79% | ||
| ROCE | 9.54% | ||
| ROIC | 7.54% | ||
| ROICexc | 10.2% | ||
| ROICexgc | 60.98% | ||
| OM | 13.97% | ||
| PM (TTM) | N/A | ||
| GM | 73.69% | ||
| FCFM | 3.68% |
ROA(3y)-37.21%
ROA(5y)-22.01%
ROE(3y)-156.16%
ROE(5y)-93.19%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y38.84%
ROICexcg growth 5Y29.35%
ROICexc growth 3Y39.52%
ROICexc growth 5Y37.04%
OM growth 3Y-6.27%
OM growth 5Y3.2%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.09%
GM growth 5Y1.84%
F-Score4
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.38 | ||
| Debt/FCF | 23.14 | ||
| Debt/EBITDA | 3.42 | ||
| Cap/Depr | 47% | ||
| Cap/Sales | 1.51% | ||
| Interest Coverage | 7.68 | ||
| Cash Conversion | 30.2% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | -0.49 |
F-Score4
WACC9.8%
ROIC/WACC0.77
Cap/Depr(3y)50.56%
Cap/Depr(5y)51.08%
Cap/Sales(3y)2.85%
Cap/Sales(5y)3.48%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)210.81%
EPS 3Y-23.41%
EPS 5YN/A
EPS Q2Q%-177.78%
EPS Next Y-100.68%
EPS Next 2Y-44.59%
EPS Next 3Y-10.81%
EPS Next 5Y26.55%
Revenue 1Y (TTM)12.57%
Revenue growth 3Y-5.05%
Revenue growth 5Y1.79%
Sales Q2Q%-32.17%
Revenue Next Year-24.56%
Revenue Next 2Y-7.53%
Revenue Next 3Y2.46%
Revenue Next 5YN/A
EBIT growth 1Y402.86%
EBIT growth 3Y-11%
EBIT growth 5Y5.05%
EBIT Next Year-74.94%
EBIT Next 3Y48.38%
EBIT Next 5Y31.94%
FCF growth 1Y408.33%
FCF growth 3Y-41.96%
FCF growth 5Y-31.95%
OCF growth 1Y129.28%
OCF growth 3Y-38.63%
OCF growth 5Y-27.87%