NICE Ltd. NICE shares have fallen 20.4% over the past year, lagging the Zacks Computer & Technology sector’s return of 29.3% and the Zacks Internet – Software industry’s growth of 30.6%.

NICE’s negative share price movement has been led by the consistent decline in service revenue over the past few quarters due to the ongoing transition to cloud-based services. Product revenues have displayed volatility, indicating challenges such as fluctuating demand and increasing competition. These factors are expected to hurt segmental sales in the near term.

Despite the challenges, the company is expected to benefit from continued growth in the cloud business and AI domain, driven by platform innovation and a growing client base.

Stiff Competition Hurts NICE’s Prospects

NICE faces stiff competition in the Customer Engagement and Financial Crime and Compliance business segments.

Customer Engagement offerings include transformative solutions like CXone that enhance consumer experiences and transform processes in Public Safety and Criminal Justice through digital innovation.

In this segment, NICE competes with companies like Aspect, Calabrio, Genesys and Verint Systems VRNT in the Workforce Optimization market.

In the Contact Center as a Service market, which continues to be dominated by traditional on-premises providers, NICE faces stiff competition from key players such as Avaya, Cisco Systems CSCO, Five9 FIVN, TalkDesk and a variety of niche vendors.

The Financial Crime and Compliance market provides solutions like X-Sight and Xceed to help financial organizations and digital banks manage risks, prevent fraud and ensure compliance in real time. Key competitors in this space include BAE Systems, FICO, NASDAQ Smarts, Oracle and SAS Institute. These competitors offer both specialized and comprehensive solutions to address financial crime risks.

NICE’s Expanding AI Platform Aids Clientele Growth

NICE launched CXone Mpower to drive end-to-end automation in customer service by leveraging AI advancements. Through its CXone platform, the company is enhancing customer engagement with new products, growth and acquisitions, improving self-service and delivering digital solutions tailored to customer needs.

The adoption of AI solutions, including Autopilot, CSAT and Copilot, has significantly boosted NICE's performance by enhancing customer engagement and automating services.

The company leads in AI-driven solutions for customer experiences, financial crime and digital policing transformation. It monitors 5 billion transactions daily, safeguarding $6 trillion and serving the top 10 global banks. With a $5-billion TAM projected by 2028, NICE is poised for growth by advancing its X-Sight platform and expanding cloud solutions for high-end clients.

The company has significantly expanded its partner ecosystem, adding more than 40 partners, including 20 international partners, which is expected to drive growth.

NICE secured more than 100 large enterprise accounts year to date, displacing legacy on-premise competitors and attracting more than 45 leading brands after failed deployments from other cloud vendors.

The company's presence in above 150 countries and its engagement with more than 85% of Fortune 100 customers provide a solid foundation for continued international expansion.

NICE’s Earnings & Sales Estimates Trend Upward

For the first quarter of fiscal 2025, the Zacks Consensus Estimate for earnings is pegged at $2.90 per share, unchanged over the past 30 days. This indicates year-over-year growth of 12.4%.

The Zacks Consensus Estimate for first-quarter fiscal 2025 revenues is pegged at $721.31 million, suggesting a 9.4% increase from the prior-year quarter’s actual.

NICE earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 4.88%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Zacks Rank

NICE currently carries a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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