BURLINGTON, MA—Thomas L. Beaudoin, a director at Cerence Inc . (NASDAQ:CRNC), has sold 5,000 shares of the company's common stock. The shares were sold at an average price of $3.11 each, amounting to a total transaction value of $15,550. Following this transaction, Beaudoin retains ownership of 201,054 shares in the company. The sale was conducted as part of a prearranged trading plan established under Rule 10b5-1 on December 21, 2023.
In other recent news, Cerence Inc. reported third-quarter fiscal year 2024 revenues of $70.5 million, marking a 14% increase year-over-year. Despite a substantial goodwill impairment charge of approximately $357 million, the company's non-GAAP profitability outperformed its guidance. The company's full-year revenue projection stands between $321 million and $327 million, with Q4 revenue estimated at $44-50 million.
Cerence has also undergone a significant leadership change with the appointment of Brian Krzanich as the new CEO, succeeding Stefan Ortmanns. Krzanich, a seasoned executive with a track record of driving growth at CDK Global (NASDAQ:CDK) Inc. and Intel (NASDAQ:INTC), joins Cerence at a time when the firm is maintaining its fourth quarter fiscal 2024 revenue forecast.
In terms of analyst ratings, Baird has reduced the price target for Cerence from $6.00 to $5.00, maintaining a neutral rating. Similarly, TD (TSX:TD) Cowen has revised its price target from $12.00 to $10.00, while still endorsing the stock with a buy rating. These adjustments follow Cerence's announcement of a substantial restructuring program, expected to yield savings between $35 million and $40 million.
Lastly, Cerence is advancing its generative AI and large language model solutions, alongside developing a next-generation AI computing platform. These are the recent developments surrounding Cerence Inc.
InvestingPro Insights
The recent insider sale by Thomas L. Beaudoin at Cerence Inc. (NASDAQ:CRNC) comes at a time when the company's stock has experienced significant volatility. According to InvestingPro data, Cerence's stock has taken a substantial hit over the last week, with a 7.55% decline in price total return. This short-term dip is part of a larger trend, as the stock has fallen dramatically over the past year, with a one-year price total return of -81.56%.
Despite these challenges, there are some positive indicators for Cerence. An InvestingPro Tip suggests that net income is expected to grow this year, and analysts predict the company will be profitable in the current fiscal year. This outlook is particularly noteworthy given that Cerence has not been profitable over the last twelve months.
The company's valuation metrics present an interesting picture. With a price-to-book ratio of 0.83 as of the last twelve months ending Q3 2024, Cerence is trading below its book value. This could indicate that the stock is undervalued, especially considering the InvestingPro Tip that the valuation implies a strong free cash flow yield.
It's worth noting that Cerence has shown strong revenue growth, with a 31.49% increase in the last twelve months ending Q3 2024. The company's gross profit margin stands at a healthy 74.78%, suggesting efficient operations despite the challenging stock performance.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Cerence, providing a deeper understanding of the company's financial health and market position.
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