CERENCE INC (CRNC) Stock Fundamental Analysis
NASDAQ:CRNC - Nasdaq - US1567271093 - Common Stock - Currency: USD
CRNC gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. CRNC has a bad profitability rating. Also its financial health evaluation is rather negative. CRNC is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
CRNC had positive earnings in the past year.
In the past year CRNC had a positive cash flow from operations.
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
CRNC has a Return On Assets of -50.57%. This is amonst the worse of the industry: CRNC underperforms 84.40% of its industry peers.
CRNC's Return On Equity of -225.49% is on the low side compared to the rest of the industry. CRNC is outperformed by 81.91% of its industry peers.
CRNC's Return On Invested Capital of 1.41% is fine compared to the rest of the industry. CRNC outperforms 68.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -50.57% | ||
| ROE | -225.49% | ||
| ROIC | 1.41% |
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 3.57% is fine compared to the rest of the industry. CRNC outperforms 69.50% of its industry peers.
In the last couple of years the Operating Margin of CRNC has grown nicely.
Looking at the Gross Margin, with a value of 70.24%, CRNC is in line with its industry, outperforming 53.55% of the companies in the same industry.
CRNC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.57% | ||
| PM (TTM) | N/A | ||
| GM | 70.24% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CRNC is destroying value.
CRNC has more shares outstanding than it did 1 year ago.
CRNC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for CRNC is higher compared to a year ago.
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.
The Altman-Z score of CRNC (-0.95) is worse than 74.47% of its industry peers.
The Debt to FCF ratio of CRNC is 6.83, which is on the high side as it means it would take CRNC, 6.83 years of fcf income to pay off all of its debts.
CRNC has a Debt to FCF ratio of 6.83. This is comparable to the rest of the industry: CRNC outperforms 53.55% of its industry peers.
CRNC has a Debt/Equity ratio of 1.32. This is a high value indicating a heavy dependency on external financing.
CRNC has a worse Debt to Equity ratio (1.32) than 78.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 6.83 | ||
| Altman-Z | -0.95 |
ROIC/WACC0.16
WACC8.62%
2.3 Liquidity
CRNC has a Current Ratio of 1.47. 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 Current ratio of 1.47 is in line compared to the rest of the industry. CRNC outperforms 48.23% of its industry peers.
A Quick Ratio of 1.46 indicates that CRNC should not have too much problems paying its short term obligations.
CRNC has a Quick ratio (1.46) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.46 |
3. Growth
3.1 Past
The earnings per share for CRNC have decreased strongly by -38.89% in the last year.
CRNC shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -23.41% yearly.
CRNC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -27.06%.
The Revenue has been growing slightly by 1.79% on average over the past years.
EPS 1Y (TTM)-38.89%
EPS 3Y-23.41%
EPS 5YN/A
EPS Q2Q%733.33%
Revenue 1Y (TTM)-27.06%
Revenue growth 3Y-5.05%
Revenue growth 5Y1.79%
Sales Q2Q%15.02%
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.
Based on estimates for the next years, CRNC will show a decrease in Revenue. The Revenue will decrease by -4.80% on average per year.
EPS Next Y-69.13%
EPS Next 2Y-44.6%
EPS Next 3Y-29.21%
EPS Next 5Y26.55%
Revenue Next Year-25.61%
Revenue Next 2Y-10.65%
Revenue Next 3Y-4.8%
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
A Price/Earnings ratio of 12.95 indicates a correct valuation of CRNC.
87.23% of the companies in the same industry are more expensive than CRNC, based on the Price/Earnings ratio.
CRNC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.03.
With a Price/Forward Earnings ratio of 24.23, CRNC is valued on the expensive side.
CRNC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CRNC is cheaper than 70.57% of the companies in the same industry.
CRNC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.28, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.95 | ||
| Fwd PE | 24.23 |
4.2 Price Multiples
77.31% of the companies in the same industry are more expensive than CRNC, based on the Enterprise Value to EBITDA ratio.
CRNC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRNC is cheaper than 94.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.79 | ||
| EV/EBITDA | 24.84 |
4.3 Compensation for Growth
CRNC's earnings are expected to decrease with -29.21% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-44.6%
EPS Next 3Y-29.21%
5. Dividend
5.1 Amount
CRNC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
8.55
-0.01 (-0.12%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners77.43%
Inst Owner Change-0.07%
Ins Owners5.47%
Ins Owner Change1.66%
Market Cap369.87M
Analysts72.31
Price Target11.83 (38.36%)
Short Float %22.53%
Short Ratio5.46
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)86.78%
Min EPS beat(2)84.96%
Max EPS beat(2)88.61%
EPS beat(4)4
Avg EPS beat(4)140.56%
Min EPS beat(4)81.16%
Max EPS beat(4)307.51%
EPS beat(8)7
Avg EPS beat(8)84.53%
EPS beat(12)10
Avg EPS beat(12)89.28%
EPS beat(16)13
Avg EPS beat(16)69.14%
Revenue beat(2)1
Avg Revenue beat(2)-0.22%
Min Revenue beat(2)-1.86%
Max Revenue beat(2)1.42%
Revenue beat(4)3
Avg Revenue beat(4)3.33%
Min Revenue beat(4)-1.86%
Max Revenue beat(4)12.76%
Revenue beat(8)6
Avg Revenue beat(8)3.91%
Revenue beat(12)9
Avg Revenue beat(12)3.08%
Revenue beat(16)9
Avg Revenue beat(16)2.01%
PT rev (1m)3.88%
PT rev (3m)0.14%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-83.02%
EPS NY rev (1m)1.61%
EPS NY rev (3m)151.39%
Revenue NQ rev (1m)-0.2%
Revenue NQ rev (3m)-6.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.95 | ||
| Fwd PE | 24.23 | ||
| P/S | 1.45 | ||
| P/FCF | 9.79 | ||
| P/OCF | 8.47 | ||
| P/B | 2.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.84 |
EPS(TTM)0.66
EY7.72%
EPS(NY)0.35
Fwd EY4.13%
FCF(TTM)0.87
FCFY10.21%
OCF(TTM)1.01
OCFY11.81%
SpS5.88
BVpS3.45
TBVpS-3.34
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -50.57% | ||
| ROE | -225.49% | ||
| ROCE | 1.79% | ||
| ROIC | 1.41% | ||
| ROICexc | 1.86% | ||
| ROICexgc | 7.88% | ||
| OM | 3.57% | ||
| PM (TTM) | N/A | ||
| GM | 70.24% | ||
| FCFM | 14.85% |
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-Score3
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 6.83 | ||
| Debt/EBITDA | 9.82 | ||
| Cap/Depr | 53.66% | ||
| Cap/Sales | 2.33% | ||
| Interest Coverage | 1.51 | ||
| Cash Conversion | 217.18% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.46 | ||
| Altman-Z | -0.95 |
F-Score3
WACC8.62%
ROIC/WACC0.16
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)-38.89%
EPS 3Y-23.41%
EPS 5YN/A
EPS Q2Q%733.33%
EPS Next Y-69.13%
EPS Next 2Y-44.6%
EPS Next 3Y-29.21%
EPS Next 5Y26.55%
Revenue 1Y (TTM)-27.06%
Revenue growth 3Y-5.05%
Revenue growth 5Y1.79%
Sales Q2Q%15.02%
Revenue Next Year-25.61%
Revenue Next 2Y-10.65%
Revenue Next 3Y-4.8%
Revenue Next 5YN/A
EBIT growth 1Y-81.46%
EBIT growth 3Y-11%
EBIT growth 5Y5.05%
EBIT Next Year-43.25%
EBIT Next 3Y-3.74%
EBIT Next 5Y31.94%
FCF growth 1Y371.68%
FCF growth 3Y-41.96%
FCF growth 5Y-31.95%
OCF growth 1Y1092.89%
OCF growth 3Y-38.63%
OCF growth 5Y-27.87%