NICE Stock Study (12-1-25)

Posted by Mark on May 13, 2025 at 07:09 | Last modified: November 30, 2025 11:35

I recently did a stock study on Nice Ltd. ADR (NICE, $106.07). Previous studies are here, here, and here.

M* writes:

     > Nice is an enterprise software company that serves the customer
     > engagement and financial crime and compliance markets. Software
     > is deployed primarily on the cloud, but also on premises. Within
     > customer engagement, Nice’s CXone is the leading CCaaS platform
     > providing solutions such as call routing, interactive voice
     > response, digital self-service, and workforce engagement
     > management. Within financial crime and compliance, Nice
     > offers risk and investigation management, fraud prevention,
     > anti-money-laundering, and compliance solutions.

Over the past decade, this medium-size company has grown sales and EPS 12.2% and 12.6% per year, respectively. Lines are mostly up, straight, and parallel except for an EPS dip in ’16. 10-year EPS R^2 is 0.87 and Value Line (VL) gives an Earnings Predictability score of 100.

Over the past decade, PTPM leads peer and industry averages while ranging from 9.7% in ’17 to 22.1% in ’24 with a last-5-year mean of 16.8%. ROE leads peer and industry averages while ranging from 6.9% in ’21 to 12.0% in ’24 with a last-5-year mean of 9.0%. Debt-to-Capital is much lower than peer and industry averages with a last-5-year mean of 20.3% (no LT debt).

Quick Ratio is 1.2 and Interest Coverage NMF per M* who assigns “Narrow” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and a Financial Health grade of B (per BI website). VL gives an A rating for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 7.4% and 8.2% for ’25 and ’26, respectively (based on 16 analysts).
• Zacks gives YOY ACE 7.4% and 8.2% for ’25 and ’26, respectively (5 analysts).
• VL projects 8.4% annualized growth from ’24-’29.
• CFRA projects 7.5% YOY and 7.7% per year for ’25 and ’24-’26, respectively.
• M* gives a 2-year ACE of 7.7% per year and projects 5-year annualized growth of 9.8% (Equity Report).

My 6.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 0.2% and 4.2% per year for ’24-’26 and ’24-’27, respectively (based on 19 analysts).
• Nasdaq.com gives ACE 5.8% and 9.5% per year for ’25-’27 and ’25-’28 (8, 3, and 2 analysts for ’25, ’27, and ’28).
• Seeking Alpha projects 4-year annualized growth of 8.8%.
• Finviz gives ACE 5-year annualized growth of 4.0% (3).
• LSEG estimates LTG at 11.6%.
• YF gives YOY ACE 10.3% growth and 9.3% contraction for ’25 and ’26, respectively (17).
• Zacks gives YOY ACE 10.4% growth and 5.2% contraction for ’25 and ’26 along with 5-year growth of 7.2%/year (9).
• VL projects 9.6% annualized growth from ’24-’29.
• CFRA projects growth of 10.2% YOY and 1.4% per year for ’25 and ’24-’26 along with a 3-year CAGR of 6.0%.
• M* gives long-term annualized growth ACE of 10.8% and projects 10.3%/year for 5 years (Equity Report).

My 4.0% forecast is near bottom of the long-term-estimate range (mean of seven: 8.9%). Initial value is ’24 EPS of $6.76/share rather than 2025 Q2 $8.80 (TTM).

My Forecast High P/E is 29.0. Over the past 10 years, high P/E ranges from 29.9 in ’15 to 76.5 in ’22 (excluding 96.9 and 107 in ’20 and ’21, respectively) with a last-5-year mean of 54.0 and 5-year-mean average P/E of 43.2 (excluding ’21 low P/E of 70.9). I am below the range.

My Forecast Low P/E is 11.0. Over the past 10 years, low P/E ranges from 20.9 in ’15 to 41.2 in ’22 (excluding 70.9 in ’21) with a last-5-year mean of 32.5. I am forecasting far below the range.

My Low Stock Price Forecast (LSPF) of $74.40 is default based on initial value given above. This is 29.9% and 24.8% less than the previous close and 52-week low, respectively.

Payout Ratio decreases from 53.9% in ’13 to zero in ’18 where it has remained ever since. I will not forecast a dividend until/unless payment is reinstituted.

These inputs land NICE in the BUY zone with a U/D ratio of 4.2. Total Annualized Return (TAR) is 17.6%.

PAR (using Forecast Average—not High—P/E) of 9.2% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 194 studies done in the past 90 days (my study and 59 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 8.0%, 10.5%, 28.0, and 16.0, respectively. I am lower on all but Forecast High P/E (29.0). VL projects a future average annual P/E of 13.0 that is much less than MS (22.0) and mine (20.0).

MS high / low EPS are $13.33 / $7.91 versus my $8.22 / $6.76 (per share). My high EPS is less due to a lower growth rate and initial value. VL’s high EPS of $17.60 soars above both and M* $11.05 is in the middle.

MS LSPF of $108.50 (INVALID on today’s date) implies a Forecast Low P/E of 13.7 versus the above-stated 16.0. MS LSPF is 14.3% less than the default $7.91/share * 16.0 = $126.56, which results in more conservative zoning. MS LSPF is 45.8% greater than mine, however.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also backing this assessment are MS TAR exceeding mine by 5.6% per year and my significantly lower LSPF.

With regard to valuation, PEG is 1.2 and 2.9 per Zacks and my projected P/E: overvalued (M* suggests significantly undervalued at 0.52). Relative Value [(current P/E) / 5-year-mean average P/E] is dirt cheap at 0.23. “Quick and dirty DCF” says undervalued by 59% (44% per M*).

Per U/D, NICE is a BUY under $115/share. BI TAR criterion would be met [238.4 / ((14.87 / 100 ) +1 ) ^ 5] ~ $119 given a forecast high price ~$238 (no dividend).

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