On Thursday, RBC Capital maintained its Outperform rating and $285.00 price target for NICE Systems Ltd (NASDAQ:NICE), following the company's announcement of first-quarter earnings and future guidance that had a mixed reception, causing its shares to decline by approximately 7% in pre-market trading. The results featured a notable 27% increase in cloud growth, or 18% on an organic basis, yet the full-year 2024 revenue guidance remained unchanged without specific projections for cloud revenue growth. The company's earnings per share (EPS) guidance saw a slight increase.
NICE Systems reported first-quarter revenue of $659.3 million, a 15% year-over-year increase and a 9% organic rise, slightly surpassing the consensus estimate. Cloud revenue stood at $468.4 million, marking a 27% year-over-year increase and 18% organic growth. The company's non-GAAP operating income for the quarter was $199.8 million, with a margin of 30.3%, which is up 170 basis points from the previous year. Non-GAAP EPS for the quarter exceeded expectations at $2.58.
The guidance for the second quarter of 2024 was mixed, including revenue projections of $657.0-667.0 million, up 14% year-over-year, and non-GAAP EPS ranging from $2.53 to $2.63. The full-year 2024 revenue guidance was reiterated at $2,715-2,735 million, a 15% increase year-over-year, while the non-GAAP EPS guidance was raised to $10.53-$10.73, indicating a 21% year-over-year rise.
In addition to the financial updates, NICE Systems announced that CEO Barak Eilam plans to step down at the end of the year. Analysts are anticipating further updates on the macro environment and customer demand for GenAI during the company's earnings call.
InvestingPro Insights
As investors digest the latest earnings and guidance from NICE Systems Ltd, it's worth noting some of the financial metrics and expert analysis that can provide a deeper understanding of the company's valuation and performance. According to InvestingPro data, NICE Systems holds a market capitalization of $12.75 billion, which is reflective of its position in the market. The company's P/E ratio stands at a high 38.29, suggesting that investors are willing to pay a premium for its earnings potential. Moreover, the company's revenue for the last twelve months as of Q4 2023 amounted to $2.38 billion, with a growth rate of 9%, indicating a solid top-line expansion.
From an investment perspective, two InvestingPro Tips shed light on the company's financial health and value. Firstly, NICE Systems is currently trading at a high earnings multiple, which could be a point of consideration for value-focused investors. Secondly, the company's liquid assets exceed its short-term obligations, demonstrating financial resilience and the ability to cover immediate liabilities. For investors seeking more detailed analysis and additional InvestingPro Tips, there are 10 more tips available for NICE Systems at Investing.com/pro/NICE. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
These InvestingPro insights, combined with the company's strong cloud revenue growth and updated EPS guidance, provide a more comprehensive picture for current and potential investors.
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