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The upside can be attributed to Cerence’s strong portfolio, expanding clientele and growing global presence in the automotive industry, all supported by a solid network of partners.
The positive momentum is reflected in its impressive third-quarter fiscal 2024 financial results. Cerence posted revenues of $70.5 million, up 14% year over year.
In the reported quarter, Cerence achieved notable success by securing eight new OEM design wins, including partnerships with major automakers like Volkswagen (VWAGY - Free Report) , Audi, SEAT and Skoda. These wins showcase the growing adoption of Cerence’s AI-powered solutions.
The company also saw a significant increase in the number of cars equipped with its technology, with the usage of connected services rising 19% over the trailing 12-month period. The upside underscores the expanding impact of Cerence’s innovative solutions in the automotive sector.
Given a strong portfolio and expanding clientele, is CRNC stock an attractive investment opportunity?
Let’s analyze.
Growing Clientele Boosts Cerence Shares Surge
Cerence's growing portfolio has been helping it expand its clientele, bolstered by partnerships with key industry players including Smart, Audi, Microsoft (MSFT - Free Report) and NVIDIA (NVDA - Free Report) .
Cerence recently announced its collaboration with Smart to develop AI-powered solutions for enhanced in-car experiences in the Concept #5, leveraging generative AI to create intuitive, voice-controlled features for smart’s next-generation vehicles.
In June, the company announced that Audi, part of the Volkswagen Group, will deploy its generative AI, Cerence Chat Pro, to enhance in-car assistant capabilities in Audi vehicles equipped with the MIB 3 infotainment platform and future models.
The introduction of the Cerence Automotive Large Language Model (CaLLM), powered by NVIDIA, transforms in-car computing platforms by tackling automaker challenges and enhancing user experiences through advanced generative AI capabilities.
CRNC’s collaboration with Microsoft further amplifies its technological edge by integrating OpenAI’s ChatGPT model into vehicles via Microsoft Azure. This integration aims to enhance in-car user experiences by combining Cerence’s automotive technology with Microsoft’s cloud capabilities.
Cerence 2024 Outlook Positive
Cerence is boosting its top-line growth through the continued expansion of its clientele in the automotive industry.
For the fiscal 2024, Cerence expects revenues to be between $321 million to $327 million.
The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $324.83 million, indicating 10.31% year-over-year growth.
The Zacks Consensus Estimate for earnings is pegged at 92 cents per share, increased by 5.7% in the past 30 days.
What Should Investors Do with Cerence Stock?
Cerence’s shares are currently trading at a significant discount to the industry average, making the stock more attractive on the valuation front.
The Value Style Score of B suggests CRNC is valued favorably at this moment. CRNC has a forward 12-month P/S of 0.32X, which is lower than the Zacks Computers - IT Services 11.23X and Cerence’s five-year median of 3.44X.
Cerence has a strong product portfolio and partner base, which are likely to provide traction to the demand for its products, particularly in the automotive sector. The stock’s attractive valuation also makes it worth investing in right now.
Image: Bigstock
Cerence Stock Surges 15.3% in a Month: Should You Buy the Stock?
Cerence‘s (CRNC - Free Report) shares have increased 15.3% in the past month against the Zacks Computer & Technology sector’s drop of 1.3% and the Zacks Computers - IT Services sector’s rise of 6.3%.
The upside can be attributed to Cerence’s strong portfolio, expanding clientele and growing global presence in the automotive industry, all supported by a solid network of partners.
The positive momentum is reflected in its impressive third-quarter fiscal 2024 financial results. Cerence posted revenues of $70.5 million, up 14% year over year.
In the reported quarter, Cerence achieved notable success by securing eight new OEM design wins, including partnerships with major automakers like Volkswagen (VWAGY - Free Report) , Audi, SEAT and Skoda. These wins showcase the growing adoption of Cerence’s AI-powered solutions.
Cerence Inc. Price and Consensus
Cerence Inc. price-consensus-chart | Cerence Inc. Quote
The company also saw a significant increase in the number of cars equipped with its technology, with the usage of connected services rising 19% over the trailing 12-month period. The upside underscores the expanding impact of Cerence’s innovative solutions in the automotive sector.
Given a strong portfolio and expanding clientele, is CRNC stock an attractive investment opportunity?
Let’s analyze.
Growing Clientele Boosts Cerence Shares Surge
Cerence's growing portfolio has been helping it expand its clientele, bolstered by partnerships with key industry players including Smart, Audi, Microsoft (MSFT - Free Report) and NVIDIA (NVDA - Free Report) .
Cerence recently announced its collaboration with Smart to develop AI-powered solutions for enhanced in-car experiences in the Concept #5, leveraging generative AI to create intuitive, voice-controlled features for smart’s next-generation vehicles.
In June, the company announced that Audi, part of the Volkswagen Group, will deploy its generative AI, Cerence Chat Pro, to enhance in-car assistant capabilities in Audi vehicles equipped with the MIB 3 infotainment platform and future models.
The introduction of the Cerence Automotive Large Language Model (CaLLM), powered by NVIDIA, transforms in-car computing platforms by tackling automaker challenges and enhancing user experiences through advanced generative AI capabilities.
CRNC’s collaboration with Microsoft further amplifies its technological edge by integrating OpenAI’s ChatGPT model into vehicles via Microsoft Azure. This integration aims to enhance in-car user experiences by combining Cerence’s automotive technology with Microsoft’s cloud capabilities.
Cerence 2024 Outlook Positive
Cerence is boosting its top-line growth through the continued expansion of its clientele in the automotive industry.
For the fiscal 2024, Cerence expects revenues to be between $321 million to $327 million.
The Zacks Consensus Estimate for fiscal 2024 revenues is pegged at $324.83 million, indicating 10.31% year-over-year growth.
The Zacks Consensus Estimate for earnings is pegged at 92 cents per share, increased by 5.7% in the past 30 days.
What Should Investors Do with Cerence Stock?
Cerence’s shares are currently trading at a significant discount to the industry average, making the stock more attractive on the valuation front.
The Value Style Score of B suggests CRNC is valued favorably at this moment. CRNC has a forward 12-month P/S of 0.32X, which is lower than the Zacks Computers - IT Services 11.23X and Cerence’s five-year median of 3.44X.
Cerence has a strong product portfolio and partner base, which are likely to provide traction to the demand for its products, particularly in the automotive sector. The stock’s attractive valuation also makes it worth investing in right now.
At present, Cerence sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.