NICE Ltd.: Valuation Re-Rating Is Likely To Be Dependent On Collections

Sep. 21, 2022 5:51 AM ETNICE Ltd. (NICE) StockNICE

Summary

  • NICE is possibly one of the most technologically advanced company in the customer experience and contact centre markets.
  • The company’s unique AI-powered conversational offering has allowed it to see sustained revenue growth and outsized gross margins in an industry dominated by service companies.
  • Despite the business strength, we find the NICE’s collection efficiency led FCF issues to be a spot of bother.
  • While we think the stock can significantly outperform should the FCF benefit from better collections, we would want to hold our horses until greater clarity emerges on this front.

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Eoneren

NICE's (NASDAQ:NICE) beat and raise of the last quarter is a testament to the company's strong technological foundations and the product-market fit that the company has. However, the declining cash flows due to collection issues do not inspire confidence and

This article was written by

HWI is a combination of human and algorithmic intelligence looking at obvious, but missed opportunities across sectors.Our calls are generally long term and based on rigorous analysis behind them.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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