NEW YORK (TheStreet) -- Shares of Nuance Communications (NUAN) jumped this afternoon, rising 6.6% to $15.94 at 2:25 p.m. EST. The Massachusetts-based software company provides speech and imaging applications and features activist investor Carl Icahn as one of its principal backers.
Oppenheimer maintained its "outperform" rating following the company's 8-K filings yesterday. In the filing Nuance announced that Janet Dillione, head of the company's health care unit, will be stepping down on March 21. The health division realized only 1% year-over-year revenue growth in the fourth quarter and a 7% decline overall. The health care division accounts for 46% of Nuance's revenue and 58% of its operational profit.
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Oppenheimer sees the change in management as positive. "Dillione has grown the healthcare business to ~$1B; however, execution has been hard to come by in the previous few quarters. Investors should view this news positively as NUAN has made some management team changes recently (i.e. replacing Bill Nelson with Bill Robbins as head of Worldwide Sales). This announcement should signal to investors that NUAN wants to bring more focus and execution to re-accelerate top-line growth."
Icahn increased his holdings in the company to 60.8 million shares last month and currently holds a 19% stake in the company.
TheStreet Ratings team rates NUANCE COMMUNICATIONS INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: