Cerence CRNC is currently leveraging an expanding clientele and robust partner base, recently teaming up with tech behemoth Microsoft MSFT.
This collaboration seamlessly integrates Cerence’s automotive technology and professional services with Microsoft Azure AI Services, focusing on enhancing in-vehicle user experiences by incorporating OpenAI’s ChatGPT model through Microsoft Azure OpenAI Service.
By deploying these capabilities to vehicles equipped with Cerence Assistant, the company aims to provide added post-purchase value for automakers and elevate user interfaces.
The joint venture takes advantage of Cerence’s deep transportation expertise and Microsoft’s cloud capabilities, seeking to offer powerful, unique in-car experiences while preserving automakers’ differentiation and customer relationships.
With continuous updates powered by Azure, Cerence solidifies its position as a leader in AI for the automotive industry, offering an enriched user experience with diverse knowledge and real-time data.
Cerence Inc. Price and Consensus
The company’s partnership with Microsoft further aligns with its goal of redefining in-car user experiences. Cerence has been benefiting from an expanding clientele with 14 strategic wins in fiscal 2023, including securing several strategic wins in the automotive and two-wheeler space during the fourth quarter of fiscal 2023.
In addition to the Microsoft partnership, Cerence has also recently collaborated with NVIDIA NVDA, introducing the Cerence Automotive Large Language Model (CaLLM), powered by NVIDIA. This collaboration aims to revolutionize in-car computing platforms, address automaker challenges, and enhance user experiences with generative AI capabilities.
Cerence is also making strides in the Chinese market, securing nine design wins in fiscal 2023 and partnering with China OEM Loncin Motors to implement Cerence Ride for AI-powered voice interaction in its high-end motorcycle line.
Outlook Remains Positive
Cerence’s expanding clientele is expected to drive top-line growth. For the first quarter of fiscal 2024, the company anticipates revenues between $128 million and $132 million, with the Zacks Consensus Estimate for revenues pegged at $130.89 million, indicating year-over-year growth of 56.46%.
Non-GAAP earnings for the fiscal first quarter are expected to be in the range of 84-92 cents per share, with the consensus mark for earnings pegged at 90 cents per share, remaining unchanged in the past 30 days.
Zacks Rank & Other Stocks to Consider
Cerence currently holds a Zacks Rank #2 (Buy).
Cerence’s shares have declined 37.1% year to date compared with the Zacks Computer & Technology sector’s rally of 7.9%.
Another top-ranked stock in the broader technology sector is Camtek CAMT, which currently sports a Zacks Rank #1 (Strong Buy). Camtek’s shares have returned 98.7% in the past six months.
The long-term earnings growth rate for CAMT is pegged at 12.26%.
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