Cerence Inc.

Technology
Computer Software: Prepackaged Software
www.cerence.com

Earnings Score
Moat Score
Safety Score

Market Cap $132.98M
PE -0
Debt $384.45M
Cash $115.52M
EV $401.90M
FCF $17.26M

Earnings

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Sales & Net Margins

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Earnings	-$579.21M
EBIT	-$556.81M
ROE	-376%
ROA	-83%
FCF	$17.26M
Equity	$154.20M
Growth Stability	-743%
PE	-0.23
PEG	0.08
PB	0.86
P/FCF	7.7
P/S	0.37
Price/Cash	0.87
Debt/Equity	2.49
Debt/FCF	22.27
Net Margins	-205%
Gross Margins	75%
Op. Margins	-156%
Earnings CAGR	-2%
Sales Growth YoY	14%
Sales Growth QoQ	4%
Sales CAGR	-0%
FCF CAGR	-15%
Equity CAGR	-14%
Earnings Stability	-0.55
Earnings Growth YoY	2K%

Earnings Growth QoQ	13%
Earnings CAGR 5Y	-3%
Sales CAGR 5Y	-0%
FCF CAGR 5Y	-21%
Equity CAGR 5Y	-18%
Earnings CAGR 3Y	-6%
Sales CAGR 3Y	-6%
FCF CAGR 3Y	-37%
Equity CAGR 3Y	-36%
Market Cap	$132.98M
Revenue	$357.46M
Assets	$673.98M
Total Debt	$384.45M
Cash	$115.52M
Shares Outstanding	41.56M
EV	401.9M
Earnings Score	6%
Moat Score	0%
Safety Score	35%
Final Score	14%
Working Capital	56.31M
Current Ratio	1.31
Shares Growth 3y	3%
Equity Growth QoQ	-67%
Equity Growth YoY	-78%

Assets & ROA

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Stockholders Equity & ROE

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Cerence Inc is a United States-based software company. It is involved in developing mobility-based solutions for drivers and their cars. The customers include all major automobile original equipment manufacturers, or OEMs, or their tier 1 suppliers. The company's revenue is generated by selling software licenses and cloud-connected services. Geographically, it derives a majority of revenue from the United States and also has a presence in Other Americas; Germany; Other Europe, Middle East and Africa; Japan and Other Asia-Pacific.

SEC Filings

Direct access to Cerence Inc. (CRNC) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-Q Dec 31
- 10-K Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-Q Dec 31
- 10-K Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Cerence Inc. compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Cerence Inc. compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR -2%

Stability -55%

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Cerence Inc. Discounted Cash Flow

Fully customizable DCF calculator online for Cerence Inc..

Years

Calculation mode

= $66M

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$17M	$15M	$12M	$10M	$8.9M	$7.5M	$6.4M	$5.4M	$4.6M	$3.9M	$3.3M	$33M
DCF		$13M	$10M	$7.9M	$6.1M	$4.7M	$3.6M	$2.8M	$2.1M	$1.6M	$1.3M	$13M
Value	$66M

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	09/2018	09/2019	09/2020	09/2021	09/2022	09/2023	TTM
Net Margins	2%	33%	-6%	12%	-95%	-19%	-205%
ROA	-	1%	1%	4%	-14%	-2%	-83%
ROE	-	9%	-2%	4%	-44%	-8%	-376%

Bad Net Margins (-205.16%)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	09/2018	09/2019	09/2020	09/2021	09/2022	09/2023	TTM
Debt over FCF	-	-	11.82	4.79	-15.16	125.32	22.27
Debt over Equity	-	-	0.32	0.29	0.42	0.43	2.49
Growth Stability	-	-	-	100%	-743%	-	-743%

Bad Debt/FCF ratio (22.27)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Bad Debt/Equity ratio (2.49)

The company is overleveraged and has a bad balance between equity and debt.

Bad Graham’s Stability (-743%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	09/2018	09/2019	09/2020	09/2021	09/2022	09/2023	CAGR 5Y
Revenue YoY growth	-	10%	9%	17%	-15%	-10%	-0%
Earnings YoY growth	-	2K%	-121%	-322%	-777%	-82%	-3%
Equity YoY growth	-	8%	-10%	8%	-31%	-3%	-18%
FCF YoY growth	-	-23%	-69%	142%	-131%	-112%	-21%