NEW YORK (AP) -- Citigroup on Thursday started coverage of Nuance Communications Inc. with a "Buy" rating, boosting shares of the provider of speech-enabling software.
Nuance climbed 49 cents, or 4.5 percent, to $11.46 on the Nasdaq.
Analyst Brent Thill likes Nuance's large market share of 60 percent to 90 percent in numerous segments.
"Nuance has garnered more than 90 percent market share in desktop dictation, 80 percent market share in call centers, and 60 percent market share in a rapidly growing market for health care dictation," Thill wrote in a client note.
Looking ahead, Nuance's future looks bright as well.
"Significant growth opportunities lie ahead, with penetration rates of only 5 percent to 10 percent, and Nuance's major product lines expected to grow between 15 percent to 40 percent per year," Thill wrote.
Thill also said Nuance's stock is up over 50 percent since hitting a low of $6.45 on Aug. 9, but can rally toward his $15 price goal by executing on growth targets.
Also playing in Nuance's favor is that its technology is hard to replicate, Thill said, noting that Nuance has attracted the most talented speech engineers in the industry. About 500 speech-related patents have been produced by 475 speech engineers and scientists. |
