NICE Gains 11% in 3 Months: Should You Buy, Sell or Hold the Stock?

Core Insights - NICE's shares have increased by 10.9% over the past three months, outperforming the Zacks Computer & Technology sector's return of 10.2% due to strong growth in the cloud business, which accounted for 72.5% of total revenues and experienced a 24% year-over-year growth in Q3 2024 [1][3] Financial Performance - NICE reported total revenues of $690 million for Q3 2024, reflecting a 15% year-over-year increase, with cloud revenues contributing $500 million, marking a 24% increase [3] - Annual recurring revenues from cloud services surpassed $2 billion, indicating significant growth potential driven by increasing demand for scalable and innovative cloud solutions [3] Segment Performance - Customer engagement revenues grew by 16% year-over-year, primarily due to the success of the AI-powered CXone solutions [4] - Revenues from financial crime and compliance grew by 8% year-over-year, driven by cloud revenues and sales of X-Sight and Xceed platforms [4] - The Financial Crime and Compliance segment is experiencing slowing growth, alongside a 12% decline in the APAC region, presenting challenges [2] Strategic Initiatives - NICE is focusing on four strategic pillars: Digital, Analytics, Cloud, and AI & Automation, to enhance customer experiences and drive growth [5] - The introduction of CXone Mpower aims to fully automate customer service, allowing businesses to optimize their service structures [6] AI Adoption and Partnerships - The adoption of AI solutions, including products like Autopilot and Copilot, has significantly contributed to NICE's performance, with a six-fold increase in annual contract value for CXone Copilot in Q3 2024 [7] - NICE has expanded its partner ecosystem in 2024, adding over 40 new partners, including 20 international ones, to support its CXone platform [5][8] Customer Base and Market Presence - NICE serves over 25,000 organizations across 150 countries, including 85 of the Fortune 100 companies, showcasing its strong market presence [9] - AUSIEX's implementation of the NICE CXone platform resulted in a 33% increase in customer engagement [9] Future Guidance - For FY24, NICE projects non-GAAP revenues between $2.715 billion and $2.735 billion, indicating a 15% year-over-year growth at the midpoint, with non-GAAP earnings estimated between $10.95 and $11.5 per share, implying a 26% year-over-year growth at the midpoint [10] - The Zacks Consensus Estimate for revenues is pegged at $2.73 billion, indicating a year-over-year growth of 14.69% [10]