DA Davidson assumes coverage on NICE Systems stock with Neutral rating

Investing.com - DA Davidson has assumed coverage on NICE Systems Ltd (NASDAQ:NICE) with a Neutral rating and a $195.00 price target. According to InvestingPro data, NICE currently trades at $170.37, with analyst targets ranging from $161 to $300, reflecting the market’s mixed sentiment on the stock.

The coverage announcement comes as NICE Systems revealed it had entered into an agreement to acquire Cognigy, a private conversational AI and automation provider, for $955 million.

DA Davidson expressed a positive stance on the strategic acquisition but noted concerns about the steep valuation given Cognigy’s current scale, and observed that the platform capabilities appear to accelerate research and development initiatives NICE is already pursuing.

The firm highlighted that the deal will be funded with cash on hand without disrupting NICE’s existing $500 million share repurchase program, which DA Davidson views as a positive factor.

The $195 price target represents approximately 14 times the company’s expected 2025 free cash flow, according to DA Davidson’s analysis.

In other recent news, NICE Ltd announced a definitive agreement to acquire Cognigy, a leader in conversational and agentic AI, for approximately $955 million. This strategic acquisition aims to enhance NICE’s CXone Mpower platform by integrating Cognigy’s AI capabilities, thereby accelerating AI-first customer service delivery across both front and back office operations. Following this announcement, Citizens JMP reiterated its Market Outperform rating on NICE, maintaining a price target of $300. DA Davidson also adjusted its outlook on NICE, raising the price target to $195 from $185 while keeping a Buy rating, influenced by NICE’s updates on the customer experience market during the Interactions 2025 event. Additionally, Cantor Fitzgerald maintained a Neutral rating with a $161 price target, noting a strategic pivot by NICE towards becoming an end-to-end AI platform. These developments reflect NICE’s ongoing efforts to expand its footprint in the AI and customer experience sectors.

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