Stock Preacher

Nuance Communications Inc. (NASDAQ: NUAN)

Nuance Communications Inc. (NUAN) is a provider of speech-based solutions for businesses and consumers worldwide. The Company’s solutions are used for tasks and services, such as requesting account information from a phone-based, self-service solution, dictating records, searching the mobile Web by voice, entering a destination into a navigation system, or working with portable document format (PDF) documents. NUAN delivers solutions that address five core markets: enterprise, mobile, healthcare, desktop dictation and imaging. On October 1, 2008, the Company acquired SNAPin Software Inc. On May 20, 2008, NUAN acquired eScription Inc. In April 2009, the Company completed the acquisition of Zi Corp. In July 2009, the Company acquired Jott. In October 2009, the Company acquired eCopy, a provider of solutions that integrate paper documents into business software applications.

NUAN was founded in 1992. It was formerly known as Visioneer Inc. and changed its name to ScanSoft Inc. in 1999 and then to Nuance Communications Inc. in 2005. The Company is headquartered in Burlington, Massachusetts.

Source: Reuters.com, SEC Filings.

Financial Summary

NUAN reported GAAP revenue of $241.0 million in the quarter ended June 30, 2009, an 11.2% increase over GAAP revenue of $216.7 million in the quarter ended June 30, 2008. The Company reported non-GAAP revenue of approximately $251.3 million, which includes $10.3 million in revenue lost to accounting treatment in conjunction with the Company’s business and technology acquisitions. Non-GAAP revenue grew approximately 9.6% over non-GAAP revenue of $229.2 million in the same quarter last year.

NUAN recognized a GAAP net loss of $1.0 million, or $(0.00) per diluted share, in the quarter ended June 30, 2009, compared with a GAAP net loss of $9.9 million, or $(0.05) per diluted share, in the quarter ended June 30, 2008. For the period ended June 30, 2009, Nuance reported non-GAAP net income of $73.3 million, or $0.26 per diluted share, compared to non-GAAP net income of $51.3 million, or $0.22 per diluted share, in the quarter ended June 30, 2008. The Company reported cash flow from operations of $53.7 million in the quarter ended June 30, 2009, compared to $48.1 million in the same quarter last year.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 15 polled investment analysts. Against the Nuance Communications Inc. company.

The 15 analysts offering 12-month price targets for NUAN have a median target of 17.00, with a high estimate of 20.00 and a low estimate of 14.00. The median estimate represents a 23.64% increase from the last price of 13.75.

Source: www.ft.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=NUAN.O

Investment Highlights

NUAN announced last week that it has extended its relationship with Mio Technology, which develops and markets products including personal navigation devices, to meet the latest developments in mobile services with Nuance Vocalizer for Automotive text-to-speech. As part of the relationship, Mio will bring NUAN’s text-to-speech to a broader range of its personal navigation devices. Nuance Vocalizer for Automotive is optimized for personal navigation devices and will enable Mio’s customers to enjoy the ease and convenience of a speech-enabled mobile experience from behind the wheel.

Mio currently uses Nuance Vocalizer for Automotive to power the readback of navigation routes across its integrated product line, including the new personal navigation system Mio Moov 300, 500 and Flat Series; the new PND TV series, Moov V505 and V735; and, the Moov 580. Nuance Vocalizer for Automotive is a robust, natural sounding text-to-speech engine that is specifically optimized for automotive and personal navigation device platforms, providing drivers with the ability to focus on the road while directions are read aloud. And since it’s flexible enough to be implemented in both high- and low-end devices, manufacturers like Mio are able to deploy it across their portfolio in a range of markets.

NUAN earlier this month announced that its innovative T9 Nav mobile search and discovery application is available on the Nokia Ovi Store for Series 60 third-edition devices. T9 Nav is a must-have application for those who want to get the most out of their mobile device, as it enables users to find and access any application or service on- or off-device. T9 Nav is based on Nuance’s pervasive and trusted T9 predictive text technology to simplify navigation and discovery of a variety of applications, content and information. By typing with just one key press per letter from the idle screen, consumers are able to navigate around complex menu structures to easily find contacts, games, stored songs, Web site bookmarks – any feature or service available on the device or on the operator’s network. And with its availability on the Nokia Ovi Store, Nokia users can download T9 Nav faster and easier.

Source: http://www.nuance.com/

Technical Analysis

Source: http://stockcharts.com

NUAN is trading below its 50-day moving average. However, this moving average is trending higher, which suggests that there has been buying interest in this stock.

NUAN has been relatively stable recently. This is evidenced by the width of its Bollinger Bands, which are tighter than normal. Additionally, NUAN is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

NUAN’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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