New Trade for December 1st, 2022

Stocks rose this morning, adding to yesterday’s gains after the Fed’s preferred inflation gauge came in lower than expected. The October Core Personal Expenditures (PCE) Index rose 0.2%, below the consensus expectation of 0.3%. The slower-than-expected increase fueled optimism on Wall Street that the central bank may soon start to ramp down its rate-hiking campaign.     

Today we’ve got our eyes on a developing story from the tech sector with solid potential for steady growth over the next five years. If investors should be greedy when others are fearful, now may be a great time to scoop up shares of this enterprise software provider.

Israel-based Nice Ltd. (NICE) is a provider of enterprise software with more than 27,000 customers (including 85% of the Fortune 100) from 150 countries. Its operating segments consist of Customer Interactions Solutions and Financial Crime & Compliance Solutions. Over the past year, the company generated $2.0 billion in revenue, approximately $1.1 billion was cloud-based revenue. Over the past three years, the company’s revenue grew 22.3%  from $1.57 billion in 2019 to $1.92 billion in 2021.   In terms of profits, its operating profit rose 10.6% to $263.9 million from $238.7 million a year earlier.   

Building on the stellar growth, the company reiterated its ambitious targets when management unveiled its NICE3D strategic plan during its recent investor’s day event. The company outlined its updated financial goals through fiscal 2026, headlined by 30%+ operating margins and double-digit revenue growth. Nice posted a solid Q3 with cloud momentum maintaining strong growth. The company’s outlook remains robust as management reiterated a 27% year-over-year cloud growth target for this year and 25% for next year. The current consensus among 12 polled analysts is to Buy NICE. A median price target of $260 represents an increase of 34% from Wednesday’s closing price.