From Nasdaq: 2024-11-19 10:36:00

Cerence (CRNC) is set to release fourth-quarter fiscal 2024 results on Nov. 21, with anticipated revenues between $44 million and $50 million. The Zacks Consensus Estimate for revenues is $48.14 million, showing a 40.39% decline from the year-ago quarter. Earnings are projected at a loss of 32 cents per share.

Despite a strong position in generative AI and an expanding clientele, Cerence’s fourth-quarter fiscal 2024 results may suffer due to lower revenues in License, Connected Services, and Professional Services. The company expects a decline in these areas, impacting the overall top-line growth.

Cerence shares have underperformed the Computer & Technology sector and Computers IT Services industry, declining 85.1% year to date. The stock is trading below the 50-day and 200-day moving averages, indicating a bearish trend.

Cerence’s expanding automotive clientele, including partnerships with major automakers like Volkswagen and Audi, has boosted its prospects. The company has secured new design wins and seen an increase in the usage of its AI-powered solutions in cars.

Cerence’s collaboration with partners like Smart, NVIDIA, Microsoft, and Tuya has strengthened its position in the industry. These partnerships aim to enhance in-car experiences and provide advanced AI capabilities to users.

Cerence’s transformation initiatives are expected to result in net cost savings in fiscal 2025. While the company targets positive adjusted EBITDA in the near term, intense competition in the automotive voice assistance domain and stretched valuation are concerns for investors.

Experts suggest waiting for a more favorable entry point to accumulate Cerence stock, which currently holds a Zacks Rank #3 (Hold). The company’s revenue framework for fiscal 2025 looks promising, with efforts to boost gross margins and profitability in the coming quarters.



Read more at Nasdaq: Cerence Q4 Earnings Loom: Should You Buy, Sell or Hold CRNC Stock?