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Cerence Inc . (NASDAQ:CRNC) Director Thomas L. Beaudoin has sold a total of 5,000 shares of company stock at a price of $3.34 per share, amounting to a transaction value of $16,700. The sale, which took place on September 3, 2024, was reported in a recent filing with the Securities and Exchange Commission (SEC).
The transaction was executed under a prearranged trading plan, known as a Rule 10b5-1 trading plan, which Beaudoin had adopted on December 21, 2023. Such plans allow company insiders to sell a predetermined number of shares at a predetermined time to avoid accusations of trading on nonpublic information.
Following the sale, Beaudoin's remaining stake in Cerence Inc. consists of 222,457 shares. The company, which specializes in prepackaged software services, has seen its shares traded on the NASDAQ under the ticker symbol CRNC.
Investors often monitor insider transactions as they can provide insights into an insider's view of the company's financial health and future prospects. However, it's important to note that these transactions may not always be indicative of a trend and can be influenced by various personal financial considerations.
The filing was signed on behalf of Thomas L. Beaudoin by Jennifer Salinas, who is acting as his attorney-in-fact.
In other recent news, Cerence Inc. reported a 14% increase in its fiscal year 2024 third-quarter earnings with revenues reaching $70.5 million. Despite a significant goodwill impairment charge of approximately $357 million impacting GAAP profitability, the company's non-GAAP profitability exceeded its own projections with adjusted EBITDA reaching $12.5 million. TD Cowen, meanwhile, adjusted its outlook on Cerence by reducing its price target from $12.00 to $10.00, while maintaining a Buy rating. This follows Cerence's announcement of a significant restructuring program which is expected to save between $35 million and $40 million, focusing on consistent EBITDA and cash flow generation. The company's management team is now expected to focus on the company's financial obligations, specifically the $87 million in 3% debt due in June 2025. These are among the recent developments for Cerence, which also anticipates net annualized cost savings between $35-40 million in the upcoming fiscal year. The company's full-year revenue projection stands between $321 million and $327 million, with Q4 revenue estimated at $44-50 million. Looking ahead, Cerence expects flat to a slight decrease in revenue for fiscal year 2025, while forecasting improved gross margins.
InvestingPro Insights
Amid the news of Director Thomas L. Beaudoin's sale of Cerence Inc. shares, investors are evaluating the company's financial health and potential for future growth. According to InvestingPro data, Cerence has a market capitalization of $127.5 million and a revenue growth of 31.49% in the last twelve months as of Q3 2024, indicating a robust increase in sales. Despite not paying dividends, Cerence's valuation implies a strong free cash flow yield, which can be an attractive feature for investors seeking companies with the potential to generate cash.
Investors should also be aware of the stock's volatility, as indicated by its significant price fluctuations over the past year. An InvestingPro Tip highlights that Cerence's stock price has fallen significantly over the last year, with a one-year price total return of -88.2%. However, in a positive turn, the company has seen a strong return over the last month, with a 13.01% increase in its price total return. This could suggest that the company's shares are beginning to recover, although the overall trend has been downward.
For those considering investing in Cerence, it is worth noting that analysts predict the company will be profitable this year, which could signal a turnaround in its financial performance. In addition, the stock's price/book ratio stands at 0.86, potentially indicating that the stock is undervalued relative to its book value. For more detailed analysis and additional InvestingPro Tips, investors can visit https://www.investing.com/pro/CRNC, where several more tips are available to help inform their investment decisions.
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