Cerence Inc.
Find Ratings ReportsCERENCE INC's gross profit margin for the first quarter of its fiscal year 2024 has increased when compared to the same period a year ago. The company grew its sales and net income significantly quarter versus same quarter a year prior, and was able to outpace the average competitor in the subsector when comparing revenue growth, but not when comparing net income growth. CERENCE INC has average liquidity. Currently, the Quick Ratio is 1.39 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.
At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 1.56% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.
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Income Statement | Q1 FY24 | Q1 FY23 |
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Net Sales ($mil) | 138.34 | 83.66 |
EBITDA ($mil) | 61.97 | 7.22 |
EBIT ($mil) | 59.29 | 2.21 |
Net Income ($mil) | 23.86 | -2.16 |
Balance Sheet | Q1 FY24 | Q1 FY23 |
---|---|---|
Cash & Equiv. ($mil) | 108.52 | 107.17 |
Total Assets ($mil) | 1264.91 | 1348.29 |
Total Debt ($mil) | 291.87 | 298.76 |
Equity ($mil) | 731.13 | 719.85 |
Profitability | Q1 FY24 | Q1 FY23 |
---|---|---|
Gross Profit Margin | 82.51 | 71.88 |
EBITDA Margin | 44.79 | 8.63 |
Operating Margin | 42.86 | 2.64 |
Sales Turnover | 0.28 | 0.24 |
Return on Assets | -2.39 | -24.62 |
Return on Equity | -4.14 | -46.12 |
Debt | Q1 FY24 | Q1 FY23 |
---|---|---|
Current Ratio | 1.9 | 1.47 |
Debt/Capital | 0.29 | 0.29 |
Interest Expense | 3.24 | 3.51 |
Interest Coverage | 18.32 | 0.63 |
Share Data | Q1 FY24 | Q1 FY23 |
---|---|---|
Shares outstanding (mil) | 41.24 | 40.02 |
Div / share | 0.0 | 0.0 |
EPS | 0.53 | -0.05 |
Book value / share | 17.73 | 17.99 |
Institutional Own % | n/a | n/a |
Avg Daily Volume | 497332.0 | 484209.0 |
SELL. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. For additional comparison, its price-to-book ratio of 0.82 indicates a significant discount versus the S&P 500 average of 4.68 and a significant discount versus the subsector average of 11.80. The price-to-sales ratio is well below both the S&P 500 average and the subsector average, indicating a discount. After reviewing these and other key valuation criteria, CERENCE INC proves to trade at a discount to investment alternatives.
Price/Earnings |
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Price/Cash Flow |
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CRNC NM | Peers 47.17 | CRNC 85.92 | Peers 33.15 | |||||||||||||||||||||
Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings. CRNC's P/E is negative making this valuation measure meaningless. |
Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. CRNC is trading at a significant premium to its peers. |
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Price/Projected Earnings |
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Price to Earnings/Growth |
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CRNC 16.24 | Peers 32.16 | CRNC NA | Peers 1.66 | |||||||||||||||||||||
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. CRNC is trading at a significant discount to its peers. |
Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. Ratio not available. |
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Price/Book |
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Earnings Growth |
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CRNC 0.82 | Peers 11.80 | CRNC 90.28 | Peers 148.13 | |||||||||||||||||||||
Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. CRNC is trading at a significant discount to its peers. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, CRNC is expected to significantly trail its peers on the basis of its earnings growth rate. |
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Price/Sales |
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Sales Growth |
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CRNC 1.73 | Peers 12.32 | CRNC 10.09 | Peers 12.66 | |||||||||||||||||||||
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. CRNC is trading at a significant discount to its subsector on this measurement. |
Lower. A sales growth rate that trails the subsector implies that a company is losing market share. CRNC trails its peers on the basis of sales growth. |
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