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On Friday, Cantor Fitzgerald reiterated its Neutral rating on NICE Systems Ltd (NASDAQ:NICE) with a steady price target of $161.00. The firm’s analyst highlighted NICE’s consistent quarterly performance and reaffirmed full-year revenue expectations, while slightly raising its EPS targets. This update comes despite a flat gross margin percentage in C25 and a slight miss in 1Q25 gross margin percentage. According to InvestingPro data, NICE maintains a robust financial health score of 3.27 (rated "GREAT"), with current analysis suggesting the stock is trading below its Fair Value. The company’s P/E ratio stands at 21.73, which appears attractive given its growth prospects.
NICE’s cloud revenue growth was bolstered by a new disclosure that its CX AI and self-service solutions are generating approximately $200 million in annual recurring revenue, which is about 10% of the company’s cloud revenue. This segment saw a 39% year-over-year increase during the first quarter of 2025. This growth has been partially offset by the integration of LiveVox, which has impacted overall cloud growth, which stood at 12% and constituted 75% of 1Q25 revenue. InvestingPro data shows the company’s overall revenue reached $2.78 billion in the last twelve months, with a healthy growth rate of 12.62%. Get access to detailed financial metrics and 8 additional ProTips about NICE’s performance with an InvestingPro subscription.
The company also announced a record share buyback in the first quarter, totaling $252 million, and plans to purchase an additional $500 million in shares. This aggressive share repurchase program is supported by NICE’s strong free cash flow yield of 8% and solid balance sheet, with more cash than debt. Despite the expectation of continued delays in large enterprise deals due to the complexity of AI implementation, NICE secured another nine-figure total contract value (TCV) deal, marking the second such deal within a year. This demonstrates the ongoing interest and success in delivering unified digital customer experience AI solutions to high-end enterprises.
Management anticipates revenue contributions from its first large deal to begin in the second quarter of 2025, with the new mega deal expected to ramp up in C26. The analyst expressed confidence in the strategic importance of AI-driven customer experience in the enterprise sector and noted NICE’s strong positioning to benefit from this trend. The company saw a 26% growth in the annual contract value of portfolio deals, which consolidate three or more vendor point solutions, in the first quarter of 2025. Discover comprehensive insights about NICE’s growth potential and market position in the detailed Pro Research Report, available exclusively on InvestingPro, along with in-depth analysis of 1,400+ other top stocks.
Cantor Fitzgerald also observed an increase in partner-led go-to-market strategies across the industry and a rise in AI-related workflow orchestration products being offered to the market. Despite these positive developments, the firm maintains its Neutral stance and $161 price target for NICE stock, which is approximately three times the company’s projected C26 revenue and aligns with its one-year average.
In other recent news, NICE Systems Ltd reported its first-quarter financial results for 2025, with non-GAAP earnings per share of $2.87, slightly surpassing the consensus estimate of $2.84. The company’s non-GAAP revenue reached $700 million, marking a 6% year-over-year increase, while cloud revenue rose by 12% to $526 million. Despite a slowdown in revenue growth, NICE’s free cash flow exceeded expectations, coming in at $265 million against a forecast of $226 million. Analysts at Citizens JMP maintained a Market Outperform rating with a $300 price target, while DA Davidson increased its price target from $180 to $185, reiterating a Buy rating. Piper Sandler maintained a Neutral rating and a $153 price target, as NICE explores strategic options under new leadership. In a strategic move, NICE partnered with ServiceNow (NYSE:NOW) to enhance AI-driven customer service solutions, aiming for a release in Q4 2025. Additionally, NICE launched the CXone Mpower Orchestrator, claiming to provide end-to-end AI automation in customer service. The company also announced a partnership with Deloitte Digital to improve customer experience workflows through AI and automation.
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