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The investors in Cerence Inc.'s (NASDAQ:CRNC) will be rubbing their hands together with glee today, after the share price leapt 136% to US$7.20 in the week following its yearly results. The business exceeded expectations with revenue of US$332m coming in 2.2% ahead of forecasts. Statutory losses were US$14.12 a share, in line with what the analysts predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cerence after the latest results.
See our latest analysis for Cerence
After the latest results, the consensus from Cerence's seven analysts is for revenues of US$242.6m in 2025, which would reflect a substantial 27% decline in revenue compared to the last year of performance. The loss per share is expected to greatly reduce in the near future, narrowing 95% to US$0.71. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$235.2m and losses of US$0.83 per share in 2025. So it seems there's been a definite increase in optimism about Cerence's future following the latest consensus numbers, with a favorable reduction in the loss per share forecasts in particular.
The consensus price target rose 42% to US$7.00, with the analysts encouraged by the higher revenue and lower forecast losses for next year. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Cerence, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$5.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cerence's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Cerence's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 27% to the end of 2025. This tops off a historical decline of 0.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 12% per year. So while a broad number of companies are forecast to grow, unfortunately Cerence is expected to see its revenue affected worse than other companies in the industry.