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Will Solid Demand for Cloud Solutions Aid NICE Q2 Earnings?

Nice NICE is set to report second-quarter 2020 results on Aug 6.

For the quarter, the company expects revenues between $387 million and $397 million. The Zacks Consensus Estimate for revenues currently stands at $392.9 million, which indicates growth of 3% from the year-ago quarter’s reported figure.

Moreover, Nice expects non-GAAP earnings between $1.28 and $1.38 per share. The consensus mark for earnings stayed at $1.31 per share over the past 30 days, indicating 4.8% growth from the figure reported in the year-ago quarter.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average being 2.8%.

Nice Ltd. Price and EPS Surprise

 

Nice Ltd. Price and EPS Surprise

Nice Ltd. price-eps-surprise | Nice Ltd. Quote

Let’s see how things are shaping up for this announcement.

Factors to Consider

Nice’s second-quarter results are expected to have benefited from solid adoption of its cloud-based CXone@home solution for customer-service space.

The company added the complete suite of workforce engagement and optimization features during second quarter that expands CXone@home capabilities. The enhanced solution ensures that agents remain productive while working from home.

The company is expected to have benefited from ongoing digital transformation to cloud amid disruptions caused by the coronavirus. Cloud revenues grew 27% year over year in the previous quarter and is expected to have continued in the to-be-reported quarter.

The solid demand for remote-working tools has further spurred demand for cloud-based solutions. Nice’s partnership with Zoom Video ZM, inked during the quarter, is noteworthy in this regard.

Nice inContact and Zoom Video provided integrated solutions to address enterprise needs like remote-employee collaboration and distributed virtual-contact centers.

Further, NICE Actimize launched cloud-based KYC Xpress that automates manual KYC procedures, thereby increasing the speed of KYC processes by more than 80%. The solution is expected to have gained adoption from financial companies who dealt with influx of loan applications due to the CARES Act in the to-be-reported quarter.

Moreover, the company’s strong recurring-revenue base (75% in first-quarter 2020) reduces top-line volatility.

Key Q2 Developments

NICE signed a new strategic partnership with Infosys INFY for its financial crime and compliance solutions. The partnership makes Infosys a reseller of NICE’s AML and fraud solutions globally.

Further, the company announced integration with Microsoft Teams and Dynamics 365 Customer Service with NICE inContactCXone during the quarter.

Moreover, Nice announced that it has entered a definitive agreement to acquire Guardian Analytics, a leading AI cloud-based financial crime risk management solution provider.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Nice has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

A Key Stock to Consider

Here is a stock worth considering as our model shows thatit has the right combination of elements to beat on earnings this reporting cycle:

Cambium Networks CMBM has an Earnings ESP of +24.73% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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