Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on solutions that support hybrid operating environments [1] - The penetration of mobile devices among users is driving businesses to invest in web-based infrastructure, applications, and security software [1] - The Internet Software industry is currently ranked in the top 32% of Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] Company Summaries UiPath Inc. (PATH) - UiPath offers an end-to-end automation platform with a range of robotic process automation solutions, primarily in the US and Europe [6] - The platform incorporates AI, ML, and NLP capabilities to enhance decision-making and information processing, with new generative AI features introduced [7] - Expected revenue and earnings growth rates for the current year are 8.5% and 5.7%, respectively, with a 7.7% improvement in the Zacks Consensus Estimate for earnings over the last 60 days [8] Calix Inc. (CALX) - Calix provides cloud and software platforms for broadband service providers across various regions [9] - The Calix Cloud platform includes configurable solutions for revenue-generating services and applications [10] - Expected revenue and earnings growth rates for 2025 are 15.3% and over 100%, respectively, with a 25.6% improvement in the Zacks Consensus Estimate for earnings over the last seven days [11] Arista Networks Inc. (ANET) - Arista Networks is positioned for cloud and AI networking with a focus on proactive products and zero-touch automation [12] - The EOS Smart AI Suite and Arista AVA enhance AI job monitoring and network security [13] - Expected revenue and earnings growth rates for the current year are 19.3% and 13.7%, respectively, with a 0.4% improvement in the Zacks Consensus Estimate for earnings over the last 30 days [14] HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform and is seeing multi-hub adoption from enterprise customers [15] - The integration of HubSpot AI features is adding value for customers, with a pricing model that lowers barriers for new users [16] - Expected revenue and earnings growth rates for the current year are 15.4% and 15.2%, respectively, with a 2.3% improvement in the Zacks Consensus Estimate for earnings over the last 90 days [17] NICE Ltd. (NICE) - NICE is benefiting from its cloud business and the adoption of AI-powered solutions to enhance customer experience [18] - Investments in automation and analytics are strengthening its competitive edge [19] - Expected revenue and earnings growth rates for the current year are 7% and 11.2%, respectively, with a 1.6% improvement in the Zacks Consensus Estimate for earnings over the last 90 days [19]

Group 1 - Both Nice (NICE) and Adyen N.V. Unsponsored ADR (ADYEY) are currently rated with a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3] - Value investors typically utilize traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [4] - NICE has a forward P/E ratio of 12.84 and a PEG ratio of 1.17, while ADYEY has a forward P/E of 45.12 and a PEG ratio of 2.25, suggesting that NICE is more attractively valued [5] Group 2 - NICE's P/B ratio is 2.87, compared to ADYEY's P/B of 12.49, further indicating that NICE is a better value option [6] - Based on the valuation metrics analyzed, NICE is considered the superior value investment compared to ADYEY [7]

Industry Overview - The artificial intelligence (AI) infrastructure space is gaining momentum, with previous concerns about DeepSeek being overstated. The global trend towards digitization is creating opportunities in markets such as 5G, blockchain, and AI. Companies are rapidly adopting generative AI, machine learning (ML), blockchain, and data science to secure a competitive edge [1] Company Recommendations - Five AI-focused stocks with favorable Zacks Ranks that have potential for double-digit returns in the short term are HubSpot Inc. (HUBS), Okta Inc. (OKTA), Adobe Inc. (ADBE), NICE Ltd. (NICE), and Teradata Corp. (TDC). Each stock carries either a Zacks Rank 1 (Strong Buy) or 2 (Buy) [2] HubSpot Inc. (HUBS) - HubSpot provides a cloud-based customer relationship management platform and is experiencing steady multi-hub adoption from enterprise customers. Pricing optimization in its starter edition is leading to solid client additions [5][6] - The integration of HubSpot AI features is enhancing customer value, and its seat pricing model reduces barriers for customer engagement. The growing adoption of inbound applications is a positive factor [6] - Expected revenue and earnings growth rates for HubSpot are 15.4% and 15%, respectively, for the current year, with a slight improvement in earnings estimates [7] - The short-term average price target for HUBS indicates a potential increase of 39.7% from the last closing price of $542.41, with a maximum upside of 71.5% [8] Okta Inc. (OKTA) - Okta operates as an identity partner, offering a suite of products for identity management and security. The company leverages AI to enhance security and user experience [10][11] - Expected revenue and earnings growth rates for Okta are 9.4% and 16.7%, respectively, for the current year, with an improvement in earnings estimates [13] - The average short-term price target for OKTA suggests a potential increase of 29.9% from the last closing price of $95.43, with a maximum upside of 55.1% [14] Adobe Inc. (ADBE) - Adobe has integrated AI applications across its flagship products and introduced generative AI-driven tools like Adobe Firefly. The company is diversifying into digital marketing services [15][16] - Expected revenue and earnings growth rates for Adobe are 9.5% and 11.8%, respectively, for the current year, with a recent improvement in earnings estimates [17] - The average short-term price target for ADBE indicates a potential increase of 35.2% from the last closing price of $365.79, with a maximum upside of 65.4% [18] NICE Ltd. (NICE) - NICE is benefiting from the strength of its cloud business and the adoption of AI-powered solutions, enhancing customer experience through its CXone platform [19][20] - Expected revenue and earnings growth rates for NICE are 7% and 11.2%, respectively, for the current year, with an improvement in earnings estimates [21] - The average short-term price target for NICE suggests a potential increase of 33.9% from the last closing price of $153.41, with a maximum upside of 95.6% [22] Teradata Corp. (TDC) - Teradata is experiencing strong cloud annual recurring revenue (ARR) growth, supported by strategic partnerships and demand for its AI solutions [23][24] - Expected revenue and earnings growth rates for Teradata are 2% and 8.3%, respectively, for the next year, with a slight improvement in earnings estimates [24] - The average short-term price target for TDC indicates a potential increase of 19.5% from the last closing price of $21.59, with a maximum upside of 62.1% [25]

Core Viewpoint - NICE (NICE) has experienced a significant downtrend, declining 9.4% over the past four weeks, but is now in oversold territory, suggesting a potential turnaround as analysts expect better earnings than previously predicted [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 typically indicating that a stock is oversold [2]. - NICE's current RSI reading is 23.59, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound towards the equilibrium of supply and demand [5]. - Stocks oscillate between overbought and oversold conditions, and the RSI helps investors identify potential reversal points, making it a useful tool for spotting entry opportunities [3]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts regarding NICE's earnings estimates, with a 0.1% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7]. - NICE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].

Group 1 - The article compares two stocks in the Internet - Software sector: Nice (NICE) and Informatica Inc. (INFA), evaluating which presents a better value opportunity for investors [1] - NICE has a Zacks Rank of 2 (Buy), indicating a stronger improvement in its earnings outlook compared to INFA, which has a Zacks Rank of 3 (Hold) [3][7] - Value investors utilize various valuation metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, to assess whether a company is undervalued [4] Group 2 - NICE has a forward P/E ratio of 13.76, while INFA has a forward P/E of 21.17, suggesting that NICE is more attractively priced [5] - The PEG ratio for NICE is 1.25, compared to INFA's PEG ratio of 2.79, indicating that NICE may offer better value relative to its expected earnings growth [5] - NICE's P/B ratio is 3.08, while INFA's P/B ratio is 3.24, further supporting the notion that NICE is the superior value option based on these metrics [6]

Core Viewpoint - NICE (NICE) has shown a recent price increase of 1.7% and has a mean price target of $204.64, indicating a potential upside of 25.9% from its current price of $162.61 [1] Price Targets and Analyst Estimates - The mean estimate consists of 14 short-term price targets with a standard deviation of $35.22, suggesting variability in analyst predictions. The lowest estimate is $161.00 (1% decline), while the highest is $300.00 (84.5% increase) [2] - Analysts' price targets can often mislead investors, as empirical research indicates that these targets rarely reflect actual stock price movements [7] - A low standard deviation among price targets indicates a high degree of agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9] Earnings Estimates and Market Sentiment - Analysts are optimistic about NICE's earnings prospects, as indicated by a strong consensus in revising EPS estimates higher, which correlates with near-term stock price movements [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has remained unchanged, with one estimate moving higher and no negative revisions [12] - NICE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential for upside [13] Conclusion on Price Movement - While the consensus price target may not be a reliable indicator of the extent of NICE's potential gains, the implied direction of price movement appears to be a useful guide [14]

Group 1 - The core thesis for NICE Ltd. (NASDAQ: NICE) is that growth is expected to remain strong due to multiple attractive growth drivers, including AI adoption and an expanding Total Addressable Market (TAM) [1] - The investment approach emphasizes a blend of value investing principles and a focus on long-term growth, aiming to buy quality companies at a discount to their intrinsic value [1]

Core Viewpoint - Investors are evaluating the value opportunities between Nice (NICE) and VERRA MOBILITY CORP (VRRM) in the Internet - Software sector, with NICE currently presenting a more favorable investment option [1]. Group 1: Zacks Rank and Earnings Outlook - NICE has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to recent revisions in earnings estimates, while VRRM has a Zacks Rank of 4 (Sell) [3]. - The Zacks Rank system emphasizes stocks with positive estimate revision trends, which suggests that NICE is positioned for better performance [2]. Group 2: Valuation Metrics - NICE has a forward P/E ratio of 13.37, significantly lower than VRRM's forward P/E of 18.31, indicating that NICE may be undervalued [5]. - The PEG ratio for NICE is 1.21, while VRRM's PEG ratio is 2.07, suggesting that NICE offers better value relative to its expected earnings growth [5]. - NICE's P/B ratio stands at 2.99, compared to VRRM's P/B of 12.77, further supporting the notion that NICE is undervalued [6]. Group 3: Value Grades - NICE has a Value grade of B, while VRRM has a Value grade of D, indicating that NICE is viewed more favorably by value investors [6].

Market Opportunity & Innovation - The company operates in a growing market, transitioning from CCaaS migration to AI-powered platforms, and from human interactions to AI-powered self-service[16, 17, 19, 21, 24, 27, 29] - Agentic AI in Customer Service market is projected to grow from $4.8 billion in 2024 to $190.5 billion in 2034[22] - The company's AI platform orchestrates workflows, agents, and knowledge to reimagine customer experience[33, 67] - The company's AI platform orchestrates over 15 billion interactions[38] Go-to-Market Strategy & Customer Adoption - The company leverages a broad partner ecosystem, with over 400 global CX partners[60] - 70% of large enterprise deals were partner-led[60] - A large global entertainment company expanded its ARR 12x from 2023 to 2025, with AI & Self-Service accounting for 40% of ARR in 2025[63] Financial Performance & Growth - The company's total revenue grew at a CAGR of 13% from 2020 to 2024, reaching $2.735 billion in 2024[99] - Cloud revenue accounted for 73% of total revenue in 2024, reaching $1.984 billion[108] - The company has over 400 customers with $1M+ in cloud revenue[111] - International cloud revenue grew at a CAGR of 52% from 2020 to 2024, reaching $198 million in 2024[113] - The company's Q1 2025 AI & Self-Service ARR was $208 million, a 39% year-over-year increase[120] - The company's 2024 Free Cash Flow (FCF) was $733 million, representing a 26.8% margin and a 53% year-over-year increase[131, 133]

Summary of NICE 2025 Investor Day Company Overview - **Company**: NICE - **Event**: 2025 Investor Day - **Date**: June 17, 2025 Key Industry Insights - **Shift from CCaaS to AI-Powered Platforms**: Companies are transitioning from traditional CCaaS (Contact Center as a Service) to AI-driven platforms to enhance customer experience, moving from human interactions to AI-powered self-service solutions [12][16] - **Growth of Digital Interactions**: There is a significant increase in digital interactions, while voice calls remain stable, indicating a dual approach to customer engagement [28][29] - **Self-Service Resolution Gap**: Currently, only 14% of service issues are resolved through self-service, highlighting a substantial opportunity for AI to bridge this gap [19][20] Strategic Focus Areas - **Three Pillars of Strategy**: 1. **Market Dynamics**: Emphasis on the transition to AI platforms and the automation of workflows beyond just customer interactions [11][12] 2. **Innovation**: Introduction of new AI capabilities, including Empower Agents, which automate complex tasks and enhance customer service [10][88] 3. **Go-to-Market Strategy**: Leveraging partnerships and expanding internationally to capture a larger market share [46][49] Financial Highlights - **Non-GAAP Financials**: All numbers presented are non-GAAP, indicating a focus on adjusted financial metrics [6] - **Addressable Market Growth**: The technology spend in customer experience is expected to increase, providing a significant total addressable market (TAM) opportunity for NICE [32][54] Product Innovations - **CXone Empower**: A new platform that integrates AI capabilities, allowing for seamless automation of workflows and enhanced customer interactions [75][100] - **Empower Agents**: A new feature that enables the creation of AI agents capable of executing complex tasks, thereby improving operational efficiency [87][90] - **Knowledge Management**: Enhanced focus on knowledge management as a critical component of AI, ensuring that data is structured and accessible [64][84] Market Positioning - **Competitive Landscape**: NICE is well-positioned in a competitive market, with a strong emphasis on customer experience and a proven track record in AI integration [33][55] - **Partnership Ecosystem**: The company has established a robust ecosystem of partners, with 75% of new logos delivered through partnerships, indicating a collaborative approach to market expansion [48][49] Customer Engagement - **Customer Journey Examples**: Highlighted a case study of a global entertainment company that increased its annual recurring revenue (ARR) significantly by adopting NICE's AI solutions [51][53] - **Focus on Multi-Brand Organizations**: NICE's solutions are designed to support multi-brand organizations, allowing them to manage various brands on a single platform [66][67] Conclusion - **Future Outlook**: NICE is optimistic about its growth potential, driven by innovation in AI and a strategic focus on enhancing customer experience through technology [54][100]