Group 1 - NICE Ltd. is recognized as one of the most undervalued foreign stocks to buy, with a significant upside potential according to analysts [1][4] - The company launched the Cognigy Simulator, an AI performance lab tool designed to help enterprises test, deploy, and scale AI agents for customer interactions [1][2] - The simulator addresses challenges in AI-driven customer experience (CX) and ensures reliable performance of AI agents in real-world scenarios [2] Group 2 - Wall Street analysts are optimistic about NICE Ltd., with a 12-month price target suggesting an upside of over 43.8% from current levels [4] - Rishi Jaluria from RBC Capital reiterated a Buy rating with a price target of $175, while Arjun Bhatia from William Blair also maintained a Buy rating without specifying a target [4] - NICE Ltd. provides AI-powered cloud platforms for digital business solutions, including CXone for customer experience and the Enlighten AI engine [5]

Core Viewpoint - NICE Ltd. is identified as one of the most undervalued tech stocks to buy in 2026, with analysts from RBC Capital and William Blair reiterating a Buy rating on the stock [1][2]. Group 1: Analyst Ratings and Price Targets - Rishi Jaluria from RBC Capital has set a price target of $175 for NICE Ltd. while maintaining a Buy rating [1]. - Arjun Bhatia from William Blair also maintains a Buy rating but has not disclosed a specific price target [1]. Group 2: Financial Expectations and Strategic Investments - Management anticipates a reduction in gross margins by 200 basis points in fiscal 2026 due to strategic investments in cloud and AI capabilities [2]. - The recent acquisition of Cognigy is expected to lead to lower interest income as cash is utilized for the acquisition [2]. Group 3: Long-term Outlook - Despite short-term challenges, the firm expects that strategic investments in AI and cloud will yield benefits over time [3]. - Analysts express confidence in the company's fundamental story and disciplined approach to growth [3]. Group 4: Company Overview - NICE Ltd. provides AI-powered cloud platforms for digital business solutions globally, including services like CXone for customer experience and the Enlighten AI engine [4].

Core Viewpoint - The article discusses the 10 most undervalued tech stocks to buy in 2026, emphasizing the ongoing health of the AI trade and the significant capital expenditure by major tech companies in infrastructure development [2][3][4]. Industry Insights - Doug Clinton from Intelligent Alpha indicates that the AI trade remains robust, with recent market pullbacks viewed as necessary for the technology sector [2]. - The "Mag 7" tech companies are projected to increase capital expenditures by approximately 35% in 2026, with potential growth reaching 50% [3]. - High valuations in technology stocks are attributed to reinvestment of free cash flow into infrastructure, although there are still undervalued opportunities in the sector [3]. Methodology for Stock Selection - The list of undervalued tech stocks was created using the Finviz Stock Screener, Seeking Alpha, and Insider Monkey's hedge fund database, focusing on stocks with a forward P/E ratio under 15 [6]. - The methodology emphasizes the importance of hedge fund interest, as imitating top hedge fund picks has historically led to market outperformance [7]. Company-Specific Highlights - **NICE Ltd. (NASDAQ:NICE)**: - Forward P/E Ratio: 9.46, with 22 hedge fund holders [8]. - Analysts maintain a positive outlook despite expected lower gross margins due to strategic investments in cloud and AI [9]. - The company anticipates a 200 basis point reduction in margins but expects long-term benefits from its investments [10]. - **TaskUs, Inc. (NASDAQ:TASK)**: - Forward P/E Ratio: 7.33, also with 22 hedge fund holders [11]. - Analysts project over 42% upside potential, but recent challenges have led to a hold rating [12]. - Despite near-term difficulties, the company is expected to return to growth with modest margin improvements by 2027 [13].

Core Insights - NICE Ltd. is recognized as one of the top big data stocks, but concerns exist regarding its ability to meet Cloud targets for 2028 without significant mergers and acquisitions [1] - The recent acquisition of Cognigy is viewed positively as a strategic move into the conversational AI sector, although competition from private firms like Sierra.AI is noted [2] - Analysts express mixed views, with Piper Sandler maintaining a Neutral rating and a $122 price target, while Wedbush downgraded NICE to Neutral due to challenges in the CX AI landscape and ambitious long-term goals impacting near-term margins [3] Company Overview - NICE Ltd. provides AI-powered cloud platforms for digital business solutions globally, including services like CXone for customer experience and the Enlighten AI engine [4] - The company utilizes artificial intelligence and analytics to combat fraud and ensure compliance with anti-money laundering regulations [4]

Core Insights - Five9 (FIVN) is witnessing a surge in enterprise AI adoption as contact center platforms shift from agent-centric models to AI-driven customer experiences [2] - The enterprise AI market is expected to grow at a CAGR of 37.6% from 2025 to 2030, with a significant migration from on-premise to cloud-native architectures [3] - FIVN's AI bookings increased over 80% year-over-year in Q3, with AI revenues making up 11% of enterprise subscription revenues, indicating a shift from pilot phases to production deployments [4] Market Dynamics - Strategic partnerships are enhancing FIVN's growth, with ServiceNow-related bookings quadrupling year-to-date and Salesforce partnerships contributing to 60% booking growth [5] - The Zacks Consensus Estimate for FIVN's 2026 revenues is $1.26 billion, reflecting a 9.54% year-over-year increase [5] Competitive Landscape - FIVN faces competition from NICE and RingCentral, which focus on analytics-driven AI and unified communications, respectively [6] - FIVN differentiates itself by maintaining conversation context across AI and human agent interactions, targeting enterprises needing end-to-end orchestration [6] Financial Performance - FIVN shares have declined 24.9% over the past six months, underperforming the Zacks Internet - Software industry and the Zacks Computer and Technology sector [7] - The forward 12-month price-to-earnings ratio for FIVN is 16.37X, significantly lower than the industry's 33.3X, indicating a favorable valuation [10] - The Zacks Consensus Estimate for FIVN's 2026 EPS is $3.17, suggesting an 8.34% year-over-year growth [12]

Group 1 - NICE, Digital Turbine, and Kimball Electronics are currently rated as Zacks Rank 1 (Strong Buy) [1] - Long-term earnings growth rates for Advanced Energy Industries, Digital Turbine, and Kimball Electronics are projected at 33.4%, 42.4%, and 20% respectively [2] - Over the past year, shares of Advanced Energy Industries, Digital Turbine, and Kimball Electronics have appreciated by 90.4%, 181.3%, and 52.5% respectively [2] Group 2 - NICE shares have decreased by 37.2% over the past year, underperforming sector peers due to macro challenges and competition [3] - AI-driven cloud revenue for NICE increased by 13% to $563 million, with CXone and Cognigy contributing to strong bookings and ARR growth [3] - NICE projects cloud revenue growth of 12-13% for 2025 and expects EPS to be between $12.18 and $12.32, reflecting a 10% year-over-year increase [3]

Summary of NICE's Conference Call Company Overview - **Company**: NICE - **Industry**: Customer Experience (CX) and Artificial Intelligence (AI) Strategic Leadership - **New CEO**: Scott Russell joined from SAP, known for driving cloud transformation, increasing SAP's revenue from €8 billion to over €17 billion [7][8] Growth Opportunities - **Market Position**: NICE is well-positioned to capitalize on the ongoing migration of enterprises from on-premise to cloud solutions, with 60% of enterprises yet to make the shift [9] - **AI Capabilities**: The acquisition of Cognigy, a leader in conversational AI, enhances NICE's AI offerings, which are core to its business [8][10] Financial Performance - **Revenue Growth**: NICE reported a consistent 12% growth in cloud revenue and a 15% year-over-year growth in cloud backlog, including Cognigy [10][11] - **Investment Plans**: NICE plans to invest approximately $160 million in 2026 to drive growth, focusing on CX, AI, cloud delivery, go-to-market strategies, and product development [12][13] Competitive Landscape - **Market Validation**: The rise of AI-native competitors like Zoom and Salesforce validates NICE's market position in customer experience [19][20] - **Unique Offering**: NICE's platform integrates omnichannel routing, analytics, and workforce engagement, setting it apart from competitors [20][21] Partnerships and Collaborations - **Co-opetition**: NICE collaborates with major players like Salesforce and Amazon, with 73% of new CXone bookings being partner-led [22][23] - **RingCentral Partnership**: The partnership with RingCentral allows NICE to penetrate the large enterprise market, complementing RingCentral's SMB focus [26] AI and Revenue Dynamics - **AI Growth**: NICE reported a 43% year-over-year growth in AI capabilities, which is a significant growth driver for the company [28][29] - **Pricing Model**: NICE employs a hybrid pricing model based on user seats and interaction sessions, adapting to the increasing volume of AI interactions [31][32] International Expansion - **Sovereign Cloud**: NICE is investing in sovereign cloud environments to meet data residency and compliance needs, providing a competitive advantage in international markets [35][36] Capital Allocation Strategy - **Investment Focus**: NICE prioritizes organic investments and M&A, with a recent acquisition of Cognigy and a $500 million share buyback program [39][42] - **Financial Health**: The company maintains a debt-free balance sheet and has generated nearly $700 million in cash flow over the past year [42]

Financial Performance & Market Position - NiCE's total revenue reached $2.9 billion[10] - The company's recurring revenue amounted to $2.6 billion[10] - Cash from operations totaled $786 million[10] - Cloud revenue reached $2.2 billion[10] Customer Base & Reach - NiCE serves over 3,300 customers[10] - The company boasts a significant presence with over 85% of Fortune 100 companies as customers[10] - NiCE operates in over 150 countries[10] Workforce & Innovation - NiCE has a workforce of over 9,500 professionals[10] - The company invests heavily in research and development with over 25,000 professionals in R&D[10] Partner Ecosystem - NiCE has a broad partner ecosystem with over 400 global CX partners[30] - Partners are involved in 75% of wins[30]

Core Insights - NiCE reported a total revenue of $732 million for Q3 2025, marking a 6% increase year-over-year, with cloud revenue specifically growing by 13% to $562.9 million [2][4][11] - The company raised its full-year 2025 revenue guidance to a range of $2,932 million to $2,946 million, indicating a projected 7% growth year-over-year at the midpoint [11][12] Financial Performance - GAAP operating income for Q3 2025 was $160.8 million, a 14% increase from $141.4 million in Q3 2024, with an operating margin of 22.0% compared to 20.5% last year [6][4] - Non-GAAP operating income increased by 5% to $230.9 million, with a non-GAAP operating margin of 31.5% [9][8] - Net income rose by 20% to $144.9 million, with a net income margin of 19.8% compared to 17.5% in the previous year [6][4] Earnings Per Share - Diluted EPS increased by 23% to $2.29 in Q3 2025, compared to $1.86 in Q3 2024 [7][10] - Non-GAAP diluted EPS rose by 10% to $3.18, up from $2.88 in the same quarter last year [10][9] Cash Flow and Investments - Operating cash flow for Q3 2025 was $190.5 million, a 20% increase year-over-year [7][25] - The company fully settled all outstanding debt during the quarter, resulting in net cash and investments of $455.9 million [7][25] Strategic Developments - The company completed the acquisition of Cognigy, enhancing its capabilities in conversational and agentic AI, contributing to the strong growth in cloud revenue [5][3] - Annual recurring revenue (ARR) for AI solutions grew by 49% year-over-year, underscoring the momentum in the AI-first strategy [5][3] Market Positioning - NiCE's AI capabilities were integrated into every new seven-figure customer experience deal, highlighting the company's focus on AI-powered solutions [2][3] - The company is positioned at the forefront of the industry's AI transformation, combining AI, contextual engagement data, and automation in a unified platform [3][2]

Company Overview - NICE serves over 25,000 customers across various industries[9] - The company boasts a significant global presence, operating in over 150 countries[9] - NICE has a substantial R&D workforce, with over 3,300 professionals[9] Financial Highlights - Cloud Revenue reached $2 billion[9] - Total Revenue amounted to $2.8 billion[9] - Recurring Revenue stands at $2.5 billion[9] - Cash from Operations is $863 million[9] Customer Experience (CX) - NICE CXone is recognized as a market leader in the CCaaS platform space[39] - The company serves a large portion of the Fortune 100, with over 85% as customers[9, 46] - Only 24% of CCaaS transition complete[45] - Only 5% of interactions are contained with Conversational AI today[45] Financial Crime & Compliance - Financial crime represents 2%-5% of Global GDP[66] - NICE Actimize is recognized as a market leader in Anti-Money Laundering (AML) solutions[58, 60] - The company provides end-to-end financial crime risk management coverage[67] - Digital fraud losses 2023-27 $350B Globally[51] Public Safety & Justice - NICE is a leader in providing incident intelligence and digital evidence management solutions[86] - The company serves a significant portion of the US and Canadian cities, with 85% as customers[84] - NICE delivers digital transformation and analytics to over 3,000 agencies[87]