CERENCE INC (CRNC) Stock Fundamental Analysis
NASDAQ:CRNC - US1567271093 - Common Stock
9.64 USD
+0.38 (+4.08%)
9.63 USD
-0.01 (-0.1%)
Taking everything into account, CRNC scores 3 out of 10 in our fundamental rating. CRNC was compared to 280 industry peers in the Software industry. There are concerns on the financial health of CRNC while its profitability can be described as average. CRNC has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
CRNC had positive earnings in the past year.
CRNC had a positive operating cash flow in the past year.
In the past 5 years CRNC reported 4 times negative net income.
CRNC had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -4.05%, CRNC is in line with its industry, outperforming 46.43% of the companies in the same industry.
CRNC has a Return On Equity of -16.55%. This is comparable to the rest of the industry: CRNC outperforms 43.21% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.79%, CRNC is in the better half of the industry, outperforming 62.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.05% | ||
| ROE | -16.55% | ||
| ROIC | 0.79% |
ROA(3y)-37.21%
ROA(5y)-22.01%
ROE(3y)-156.16%
ROE(5y)-93.19%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
CRNC's Operating Margin of 2.16% is fine compared to the rest of the industry. CRNC outperforms 63.93% of its industry peers.
In the last couple of years the Operating Margin of CRNC has grown nicely.
CRNC's Gross Margin of 70.76% is in line compared to the rest of the industry. CRNC outperforms 56.43% of its industry peers.
CRNC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.16% | ||
| PM (TTM) | N/A | ||
| GM | 70.76% |
OM growth 3Y-6.27%
OM growth 5Y3.2%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.09%
GM growth 5Y1.84%
2. Health
2.1 Basic Checks
CRNC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for CRNC has been increased compared to 1 year ago.
CRNC has more shares outstanding than it did 5 years ago.
CRNC has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of -0.95, we must say that CRNC is in the distress zone and has some risk of bankruptcy.
CRNC has a Altman-Z score of -0.95. This is in the lower half of the industry: CRNC underperforms 74.29% of its industry peers.
CRNC has a debt to FCF ratio of 4.77. This is a neutral value as CRNC would need 4.77 years to pay back of all of its debts.
The Debt to FCF ratio of CRNC (4.77) is comparable to the rest of the industry.
A Debt/Equity ratio of 1.28 is on the high side and indicates that CRNC has dependencies on debt financing.
CRNC has a Debt to Equity ratio of 1.28. This is in the lower half of the industry: CRNC underperforms 77.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.28 | ||
| Debt/FCF | 4.77 | ||
| Altman-Z | -0.95 |
ROIC/WACC0.08
WACC9.62%
2.3 Liquidity
A Current Ratio of 1.77 indicates that CRNC should not have too much problems paying its short term obligations.
CRNC has a Current ratio (1.77) which is comparable to the rest of the industry.
CRNC has a Quick Ratio of 1.75. This is a normal value and indicates that CRNC is financially healthy and should not expect problems in meeting its short term obligations.
CRNC's Quick ratio of 1.75 is in line compared to the rest of the industry. CRNC outperforms 56.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.75 |
3. Growth
3.1 Past
The earnings per share for CRNC have decreased strongly by -54.96% in the last year.
The earnings per share for CRNC have been decreasing by -23.41% on average. This is quite bad
CRNC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -31.20%.
The Revenue has been growing slightly by 1.79% on average over the past years.
EPS 1Y (TTM)-54.96%
EPS 3Y-23.41%
EPS 5YN/A
EPS Q2Q%-36.84%
Revenue 1Y (TTM)-31.2%
Revenue growth 3Y-5.05%
Revenue growth 5Y1.79%
Sales Q2Q%-11.77%
3.2 Future
Based on estimates for the next years, CRNC will show a very strong growth in Earnings Per Share. The EPS will grow by 26.55% on average per year.
The Revenue is expected to decrease by -5.50% on average over the next years.
EPS Next Y-60.09%
EPS Next 2Y-28.52%
EPS Next 3Y-18.96%
EPS Next 5Y26.55%
Revenue Next Year-24.02%
Revenue Next 2Y-10.75%
Revenue Next 3Y-5.5%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.34, the valuation of CRNC can be described as correct.
CRNC's Price/Earnings ratio is rather cheap when compared to the industry. CRNC is cheaper than 81.79% of the companies in the same industry.
When comparing the Price/Earnings ratio of CRNC to the average of the S&P500 Index (27.07), we can say CRNC is valued slightly cheaper.
With a Price/Forward Earnings ratio of 16.41, CRNC is valued correctly.
Based on the Price/Forward Earnings ratio, CRNC is valued cheaply inside the industry as 83.57% of the companies are valued more expensively.
CRNC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.34 | ||
| Fwd PE | 16.41 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRNC is valued a bit cheaper than 73.21% of the companies in the same industry.
94.64% of the companies in the same industry are more expensive than CRNC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.01 | ||
| EV/EBITDA | 32.42 |
4.3 Compensation for Growth
CRNC's earnings are expected to decrease with -18.96% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-28.52%
EPS Next 3Y-18.96%
5. Dividend
5.1 Amount
CRNC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
9.64
+0.38 (+4.08%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners77.25%
Inst Owner Change-7.5%
Ins Owners5.47%
Ins Owner Change0.23%
Market Cap417.60M
Analysts74.55
Price Target11.99 (24.38%)
Short Float %20.25%
Short Ratio3.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)133.76%
Min EPS beat(2)84.96%
Max EPS beat(2)182.56%
EPS beat(4)4
Avg EPS beat(4)109.32%
Min EPS beat(4)81.16%
Max EPS beat(4)182.56%
EPS beat(8)7
Avg EPS beat(8)98.37%
EPS beat(12)11
Avg EPS beat(12)104.54%
EPS beat(16)13
Avg EPS beat(16)79.82%
Revenue beat(2)2
Avg Revenue beat(2)6.35%
Min Revenue beat(2)1.42%
Max Revenue beat(2)11.28%
Revenue beat(4)3
Avg Revenue beat(4)5.9%
Min Revenue beat(4)-1.86%
Max Revenue beat(4)12.76%
Revenue beat(8)7
Avg Revenue beat(8)5.37%
Revenue beat(12)10
Avg Revenue beat(12)4.42%
Revenue beat(16)10
Avg Revenue beat(16)2.78%
PT rev (1m)1.29%
PT rev (3m)1.44%
EPS NQ rev (1m)-23.43%
EPS NQ rev (3m)-1475.49%
EPS NY rev (1m)29.31%
EPS NY rev (3m)31.39%
Revenue NQ rev (1m)-3.9%
Revenue NQ rev (3m)-5.13%
Revenue NY rev (1m)2.13%
Revenue NY rev (3m)2.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.34 | ||
| Fwd PE | 16.41 | ||
| P/S | 1.7 | ||
| P/FCF | 10.01 | ||
| P/OCF | 7.66 | ||
| P/B | 2.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 32.42 |
EPS(TTM)0.59
EY6.12%
EPS(NY)0.59
Fwd EY6.09%
FCF(TTM)0.96
FCFY9.99%
OCF(TTM)1.26
OCFY13.06%
SpS5.68
BVpS3.59
TBVpS-3.31
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.05% | ||
| ROE | -16.55% | ||
| ROCE | 1% | ||
| ROIC | 0.79% | ||
| ROICexc | 0.93% | ||
| ROICexgc | 2.78% | ||
| OM | 2.16% | ||
| PM (TTM) | N/A | ||
| GM | 70.76% | ||
| FCFM | 16.97% |
ROA(3y)-37.21%
ROA(5y)-22.01%
ROE(3y)-156.16%
ROE(5y)-93.19%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y38.84%
ROICexcg growth 5Y29.35%
ROICexc growth 3Y39.52%
ROICexc growth 5Y37.04%
OM growth 3Y-6.27%
OM growth 5Y3.2%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.09%
GM growth 5Y1.84%
F-Score4
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.28 | ||
| Debt/FCF | 4.77 | ||
| Debt/EBITDA | 12.12 | ||
| Cap/Depr | 115.38% | ||
| Cap/Sales | 5.2% | ||
| Interest Coverage | 0.95 | ||
| Cash Conversion | 332.31% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.75 | ||
| Altman-Z | -0.95 |
F-Score4
WACC9.62%
ROIC/WACC0.08
Cap/Depr(3y)50.56%
Cap/Depr(5y)51.08%
Cap/Sales(3y)2.85%
Cap/Sales(5y)3.48%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-54.96%
EPS 3Y-23.41%
EPS 5YN/A
EPS Q2Q%-36.84%
EPS Next Y-60.09%
EPS Next 2Y-28.52%
EPS Next 3Y-18.96%
EPS Next 5Y26.55%
Revenue 1Y (TTM)-31.2%
Revenue growth 3Y-5.05%
Revenue growth 5Y1.79%
Sales Q2Q%-11.77%
Revenue Next Year-24.02%
Revenue Next 2Y-10.75%
Revenue Next 3Y-5.5%
Revenue Next 5YN/A
EBIT growth 1Y-91.13%
EBIT growth 3Y-11%
EBIT growth 5Y5.05%
EBIT Next Year-43.25%
EBIT Next 3Y-3.74%
EBIT Next 5Y31.94%
FCF growth 1Y372.79%
FCF growth 3Y-41.96%
FCF growth 5Y-31.95%
OCF growth 1Y726.85%
OCF growth 3Y-38.63%
OCF growth 5Y-27.87%