CRNC Stock Analysis: Cerence | NASDAQ
Software - Application | NASDAQ, USA | Market Cap: 512m USD | 12M Return: 21.4% | Charts, Fundamentals & Technical Analysis
Avg Turnover: 10.1M
Qual. Beats: 0
Rev. Trend: -30.8%
Qual. Beats: 1
Warnings
Tailwinds
No distinct edge detected
Seasonality 6.8 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
Cerence Inc. (NASDAQ: CRNC) is a U.S.-based software company that develops AI-powered virtual assistants primarily for the automotive and mobility sector, with operations spanning North America, Europe, the Middle East, Africa, and Asia-Pacific. Its product portfolio includes edge and cloud-connected software components, virtual assistant platforms, and professional services, with core capabilities in speech recognition, natural language understanding, speech signal enhancement, text-to-speech, and acoustic tuning. The company is headquartered in Burlington, Massachusetts, and was incorporated in 2020 following its 2019 IPO.
The firm generates revenue by licensing its AI-driven conversational technology to automakers and tier-1 suppliers, typically on a per-vehicle or royalty-based model, which is the standard approach in the embedded automotive software industry. Cerence has strategic partnerships with Arm Kleidi and SiMa.ai aimed at advancing CaLLM Edge, a small language model optimized for in-vehicle AI processing. As a player in the niche automotive AI software market, it competes with general-purpose voice AI providers while benefiting from the broader industry shift toward AI-enhanced in-cabin experiences and software-defined vehicles.
- Automaker production volumes directly drive license royalty revenue
- Big Tech AI assistants threaten Cerences automotive market share
- Cloud subscription revenue shift accelerates toward recurring model
| Net Income: -19.6m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.12 > 0.02 and ΔFCF/TA 6.49 > 1.0 |
| NWC/Revenue: 32.10% < 20% (prev 29.21%; Δ 2.88% < -1%) |
| CFO/TA 0.14 > 3% & CFO 88.5m > Net Income -19.6m |
| Net Debt (94.1m) to EBITDA (37.8m): 2.49 < 3 |
| Current Ratio: 1.90 > 1.5 & < 3 |
| Outstanding Shares: last quarter (46.9m) vs 12m ago -8.99% < -2% |
| Gross Margin: 78.28% > 18% (prev 69.80%; Δ 8.48% > 0.5%) |
| Asset Turnover: 47.12% > 50% (prev 38.20%; Δ 8.92% > 0%) |
| Interest Coverage Ratio: 3.87 > 6 (EBIT TTM 28.1m / Interest Expense TTM 7.26m) |
| A: 0.16 (Total Current Assets 204.3m - Total Current Liabilities 107.3m) / Total Assets 617.0m |
| B: -1.53 (Retained Earnings -944.0m / Total Assets 617.0m) |
| C: 0.04 (EBIT TTM 28.1m / Avg Total Assets 641.2m) |
| D: 0.35 (Book Value of Equity 158.5m / Total Liabilities 458.4m) |
| Altman-Z'' = -3.30 = D |
| DSRI: 0.82 (Receivables 63.6m/65.0m, Revenue 302.1m/254.2m) |
| GMI: 0.89 (GM 69.80% / 78.28%) |
| AQI: 1.02 (AQ_t 0.59 / AQ_t-1 0.58) |
| SGI: 1.19 (Revenue 302.1m / 254.2m) |
| TATA: -0.18 (NI -19.6m - CFO 88.5m) / TA 617.0m) |
| Beneish M = -3.14 (Cap -4..+1) = AA |
As of July 02, 2026, the stock is trading at USD 11.53 with a total of 620,825 shares traded. Over the past week, the price has changed by +16.70%, over one month by -9.50%, over three months by +70.31% and over the past year by +21.37%.
Current recommended Stop Loss: 10.20 (which is 11.5% or 1.6 ATR below the current price).
Cerence has received a consensus analysts rating of 3.14. Therefore, it is recommended to hold CRNC.
- StrongBuy: 0
- Buy: 1
- Hold: 6
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 10.8 | -6.8% |
P/E Forward = 44.2478
P/S = 1.693
P/B = 3.0867
Revenue TTM = 302.1m USD
EBIT TTM = 28.1m USD
EBITDA TTM = 37.8m USD
Long Term Debt = 172.7m USD (from longTermDebt, last quarter)
Short Term Debt = 4.10m USD (from shortTermDebt, last quarter)
Debt = 202.4m USD (from shortLongTermDebtTotal, last quarter) + Leases 14.8m
Net Debt = 94.1m USD (calculated: Debt 202.4m - CCE 108.3m)
Enterprise Value = 605.6m USD (511.5m + Debt 202.4m - CCE 108.3m)
Interest Coverage Ratio = 3.87 (Ebit TTM 28.1m / Interest Expense TTM 7.26m)
EV/FCF = 8.07x (Enterprise Value 605.6m / FCF TTM 75.1m)
FCF Yield = 12.40% (FCF TTM 75.1m / Enterprise Value 605.6m)
FCF Margin = 24.85% (FCF TTM 75.1m / Revenue TTM 302.1m)
Net Margin = -6.50% (Net Income TTM -19.6m / Revenue TTM 302.1m)
Gross Margin = 78.28% ((Revenue TTM 302.1m - Cost of Revenue TTM 65.6m) / Revenue TTM)
Gross Margin QoQ = 73.68% (prev 86.33%)
Tobins Q-Ratio = 0.98 (Enterprise Value 605.6m / Total Assets 617.0m)
Interest Expense / Debt = 3.59% (Interest Expense 7.26m / Debt 202.4m)
Taxrate = 21.0% (US federal default 21%)
NOPAT = 22.2m (EBIT 28.1m * (1 - 21.00%))
Current Ratio = 1.90 (Total Current Assets 204.3m / Total Current Liabilities 107.3m)
Debt / Equity = 1.28 (Debt 202.4m / totalStockholderEquity, last quarter 158.5m)
Debt / EBITDA = 2.49 (Net Debt 94.1m / EBITDA 37.8m)
Debt / FCF = 1.25 (Net Debt 94.1m / FCF TTM 75.1m)
Total Stockholder Equity = 153.8m (last 4 quarters mean from totalStockholderEquity)
RoA = -3.06% (Net Income -19.6m / Total Assets 617.0m)
RoE = -12.77% (Net Income TTM -19.6m / Total Stockholder Equity 153.8m)
RoCE = 8.60% (EBIT 28.1m / Capital Employed (Equity 153.8m + L.T.Debt 172.7m))
RoIC = 4.45% (NOPAT 22.2m / Invested Capital 498.6m)
WACC = 15.33% (E(511.5m)/V(713.9m) * Re(20.27%) + D(202.4m)/V(713.9m) * Rd(3.59%) * (1-Tc(0.21)))
Discount Rate = 20.27% (= CAPM, Blume Beta Adj.) -> capped to 13.17%
Shares (quarterly) Correlation: 46.67 | Cagr: -2.15%
[DCF] Terminal Value 58.72% ; FCFF base≈60.1m ; Y1≈68.9m ; Y5≈101.5m
[DCF] Fair Price = 12.90 (EV 676.9m - Net Debt 94.1m = Equity 582.8m / Shares 45.2m; r=15.33% [WACC]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: N/A | EPS CAGR: N/A | SUE: -0.42 | # QB: 0
Revenue Correlation: -30.76 | Revenue CAGR: -4.86% | SUE: 1.29 | # QB: 1
EPS current Year (2026-09-30): EPS=0.71 | Chg30d=+0.00% | Revisions=-11% | GrowthEPS=+34.7% | GrowthRev=+25.3%
EPS next Year (2027-09-30): EPS=0.77 | Chg30d=+0.00% | Revisions=+0% | GrowthEPS=+7.9% | GrowthRev=-7.4%
[Analyst] Revisions Ratio: -11%