Cerence Inc.
$12.28
-6.3%Cerence Inc. provides AI powered virtual assistants for the mobility/transportation market worldwide. The company offers edge software components; cloud-connected components and related toolkits and applications; and virtual assistant coexistence and professional services. It also provides conversational artificial intelligence-based solutions, including speech recognition, natural language understanding, speech signal enhancement, text-to-speech, and acoustic modeling technology. Cerence Inc. is headquartered in Burlington, Massachusetts.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
Medium confidenceValuation multiple is compressed (P/E -28.6).
Valuation inputs: P/E -28.6, earnings yield N/A, momentum -6.3%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE -12.4%, ROIC +2.5%).
Profitability stack: net margin -7.4%, ROE -12.4%, ROIC +2.5%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile is elevated and scenario stress-testing is essential.
Risk factors: liabilities/assets +76.1%, momentum -6.3%, net margin -7.4%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Cerence Inc. Market vs Earnings Trajectory
Performance Analysis
EPS Growth
Declining earnings warrant investigation into business challenges and competitive position.
Price-EPS Relationship
Price is rising despite declining earnings—caution advised as valuation may be stretched.
Stock Price Change
Over the 1Y period, stock price has increased by 26.3%.
P/E Ratio (TTM)
Relatively low P/E may indicate undervaluation or lower growth expectations.
Key Insight
Despite declining earnings (-103.4%), the stock price has risen (+26.3%). This disconnect suggests investors may be optimistic about future turnaround, but earnings recovery is critical to sustain the valuation.
Cerence Inc. Fair Value Envelope
Cerence Inc. Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Acceptable margins but limited operational leverage. Operating expense control is important.
Net Profit Margin
Net losses indicate the company is burning cash. Sustainability depends on path to profitability.
Profitability Insight
Margin squeeze alert: Healthy gross margins but weak operating margins suggest excessive operating expenses. Cost optimization could unlock significant value.
Cerence Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Negative free cash flow despite positive earnings raises concerns about cash generation ability or heavy capital requirements.
CapEx Intensity
Moderate capital requirements typical of many stable businesses. Healthy balance between reinvestment and cash generation.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Working capital inflow boosted cash flow. Efficient management of receivables, inventory, and payables contributing positively.
Cerence Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Strong liquidity. The company has adequate resources to meet short-term liabilities.
Debt-to-Equity Ratio
High financial leverage. Heavy reliance on debt may indicate increased financial risk and potential solvency concerns.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Capital-intensive business with significant long-term investments in property, equipment, or intangibles.
Cerence Inc. Street Expectations Map
Wall Street analysts project that CRNC stock may decline over the coming 12 months. The consensus 1-year price target stands at 8.00, with estimates ranging from a low of 8.00 to a high of 8.00.
The consensus 1-year price target stands at 8.00, with estimates ranging from a low of 8.00 to a high of 8.00.
Analyst Consensus Analysis
Upside Potential
Significant downside risk. Stock trading well above analyst consensus suggests elevated valuation concerns and potential correction.
Analyst Agreement
High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.
Risk-Reward Profile
Balanced risk-reward. Upside and downside potential relatively symmetric. Suitable for moderate risk tolerance with conviction in thesis.
Analyst Conviction
Bearish or uncertain outlook. Limited upside or poor consensus suggests challenges ahead or fundamental concerns.
Market Sentiment Insight
Consensus overvaluation: Analysts agree the stock is richly valued with limited upside. Consider booking profits or defensive positioning unless you have contrarian conviction in unrecognized catalysts.
Cerence Inc. Insider Positioning
During the last 12 months, insiders have purchased $19K and sold $4.57M worth of CRNC shares, resulting in $4.55M of net selling activity.
3 Months
0
0.00
0
0.00
+0
+$0
3-6 Months
0
0.00
0
0.00
+0
+$0
6-9 Months
90.3K
902.00
370.6K
4.52M
-4.5M
-$4.52M
9-12 Months
1.8K
18.06K
4.0K
50.94K
-33K
-$33K
Top Buyers
Rodriquez Antonio
Officer: Cfo
$18K
Schanz Nils
Officer: Evp Product & Technology
$902
Top Sellers
Salinas Jennifer
Officer: Evp Chief Admin Officer
$1.79M
Krzanich Brian M
Director, Officer: Chief Executive Officer
$1.51M
Rodriquez Antonio
Officer: Cfo
$489K
Mentz Christian
Officer: Evp, Chief Revenue Officer
$394K
Schanz Nils
Officer: Evp Product & Technology
$390K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $4.55M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Insider Participation
5 insider sellers vs. 2 buyers. Widespread selling across multiple insiders may signal concerns.
crnc Dividend History
Learning Layer
Related Guides
Build conviction on CRNC by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.