ThinkEquity raises its rating on Nuance Communications (NUAN +1%) to Buy from Hold and hikes its price target to $34 from $22. Shares are up 69% in six months, but the rally can continue “due to sustainable factors of a secular market opportunity in speech [recognition] technology, particularly in mobile and consumer product markets and Nuance’s unique competitive scale."
Nuance (NUAN +1.3%) edges higher after FBR (Outperform) lifts its PT to $33 from $28; the firm says its checks indicate Nuance saw healthy deal activity in calendar Q4, and has a strong pipeline for FY12 (ends in September). FBR adds it believes the voice recognition software provider is in the early stages of a major growth opportunity. (previously)
Nuance Communications (NUAN +5%) acquires Vlingo, developer of the Virtual Assistant, which uses voice to text technology and intelligent voice interface processing, for an undisclosed sum. The company hopes to capitalize on explosive market demand for virtual assistant and voice-enabled capabilities spanning phones, tablets, cars, televisions, navigation devices, music players, PCs and more, and estimates market demand to be near $5B.
Nuance (NUAN -0.2%) is outperforming after beating FQ4 estimates, and guiding in prepared remarks (.pdf) for FY12 revenue of $1.66B-$1.71B ($1.61B consensus) and EPS of $1.55-$1.62 ($1.60 consensus). Deutsche is pleased with the rebound in Nuance's enterprise business, while Canaccord thinks Apple's Siri, which is believed to use Nuance's software, will compel rivals to develop similar services.
Shares of Transcend Services (TRCR) fall 9.8% after the firm misses Q3 earnings estimates by a penny and advises that it saw a higher-than-normal attrition rate during the period. The medical transcription company says about the half of the annual revenue lost is attributable to a customer that it acquired.
There are good reasons why Apple (AAPL +2.9%) may not make a play for Nuance (NUAN +2.6%): Apple doesn't make $8B acquisitions, and Nuance is in areas such as medical transcriptions that Apple doesn't want. But Mike Dawson thinks they'd be crazy not to try, since it could be worth it just to keep the speech recognition technology away from Google (GOOG) and Microsoft (MSFT).
Ancestry.com (ACOM +3.7%) rises on its inclusion in Barrons' list of tech stock picks, and also on a bullish note from Jefferies: the firm expects Ancestry.com to report in-line Q3 results on Wednesday, in spite of investor concerns about subscription growth. Other Barrons picks moving higher: ERTS +2.8%. NUAN +2.4%. FTNT +2%. TIBX +3.2%.
Barrons has named its top 10 tech stocks for 2012, and topping the list is Fusion-io (FIO), out of a belief the flash memory firm is a takeover target. Apple (AAPL) comes in at #10 on expectations of market share gains, strong iPhone 4S sales, and a possible dividend or buyback. Also on the list: EBAY, ORCL, HPQ, TIBX, ERTS, NUAN, ACOM, FTNT.
Voice recognition software provider Nuance (NUAN) is acquiring Swype, a developer of an innovative touchscreen keyboard solution for smartphones, for $102.5M. Michael Arrington calls himself "a big fan" of Swype. NUAN +1.5% premarket.