The time has not yet come to remove your chips from the table: Cerence Inc. (CRNC)

Cerence Inc. (NASDAQ: CRNC) stock fell -1.10% on Tuesday to $23.30 against a previous-day closing price of $23.56. With 0.5 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.45 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $23.48 whereas the lowest price it dropped to was $22.84. The 52-week range on CRNC shows that it touched its highest point at $66.61 and its lowest point at $12.82 during that stretch. It currently has a 1-year price target of $28.73. Beta for the stock currently stands at 2.61.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CRNC was up-trending over the past week, with a rise of 6.93%, but this was up by 22.57% over a month. Three-month performance surged to 46.36% while six-month performance fell -12.37%. The stock lost -61.20% in the past year, while it has gained 25.74% so far this year. A look at the trailing 12-month EPS for CRNC yields -7.90 with Next year EPS estimates of 1.31. For the next quarter, that number is 0.09. This implies an EPS growth rate of -779.00% for this year and 2720.00% for next year. EPS is expected to grow by 15.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -52.00%.

Float and Shares Shorts:

At present, 39.41 million CRNC shares are outstanding with a float of 39.22 million shares on hand for trading. On Oct 13, 2022, short shares totaled 4.09 million, which was 10.38% higher than short shares on Sep 14, 2022. In addition to Dr. Stefan Ortmanns as the firm’s Pres, CEO & Director, Mr. Thomas L. Beaudoin serves as its Exec. VP, CFO, Principal Financial Officer, Principal Accounting Officer & Director.


Institutional Ownership:

Through their ownership of 103.54% of CRNC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 55.03% of CRNC, in contrast to 4.15% held by mutual funds. Shares owned by individuals account for 39.29%. As the largest shareholder in CRNC with 14.89% of the stake, BlackRock Fund Advisors holds 5,947,751 shares worth 5,947,751. A second-largest stockholder of CRNC, The Vanguard Group, Inc., holds 4,444,974 shares, controlling over 11.13% of the firm’s shares. Columbia Management Investment Ad is the third largest shareholder in CRNC, holding 3,047,658 shares or 7.63% stake. With a 7.29% stake in CRNC, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 2,913,406 shares are owned by the mutual fund manager. The Columbia Seligman Technology & In, which owns about 4.11% of CRNC stock, is the second-largest Mutual Fund holder. It holds 1,641,024 shares valued at 30.41 million. Vanguard Total Stock Market Index holds 2.97% of the stake in CRNC, owning 1,185,156 shares worth 21.96 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CRNC since 11 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 8 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CRNC analysts setting a high price target of $40.00 and a low target of $18.00, the average target price over the next 12 months is $25.10. Based on these targets, CRNC could surge 71.67% to reach the target high and fall by -22.75% to reach the target low. Reaching the average price target will result in a growth of 7.73% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CRNC will report FY 2023 earnings on 11/20/2023. Analysts have provided yearly estimates in a range of $0.05 being high and -$0.14 being low. For CRNC, this leads to a yearly average estimate of -$0.05. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Cerence Inc. surprised analysts by $0.08 when it reported -$0.14 EPS against a consensus estimate of -$0.22. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $0.11 and the low estimate is $0.07. The average estimate for the next quarter is thus $0.09.

Summary of Insider Activity:

Insiders traded CRNC stock several times over the past three months with 9 Buys and 0 Sells. In these transactions, 655,105 shares were bought while 0 shares were sold. The number of buy transactions has increased to 20 while that of sell transactions has risen to 7 over the past year. The total number of shares bought during that period was 807,424 while 50,537 shares were sold.

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