Cerence, Inc. (CRNC)
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
$8.53+0.47%
Close 2026-09-04 · 1-day change
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
Intact: The reason to own it still holds.
Cerence aims for revenue near $312 million in FY 2026. It targets gross margins around 79.5%. Free cash flow is expected near $71 million. Cost cuts and AI tech could improve profits.
Revenue is declining and profit misses continue. Gross margin is below target at about 74%. The company is still loss-making and faces high risk. Recent selloff shows market doubts.
The market expects about -3% revenue growth and a tough near-term outlook. Our fair value is around $25.68, reflecting cautious optimism. We see potential if turnaround targets are met.
Breaks if: Adjusted EBITDA falls below $60M in FY 2026
Breaks if: Free cash flow falls below $66M in FY 2026
Breaks if: Gross margin falls below 75% in FY 2026
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a growth-oriented thesis with a focus on achieving revenue and profitability targets. The current state is cautious due to recent earnings misses and mixed management performance.
The market appears to have priced in a justified valuation, with expectations slightly below average compared to peers. There is a low level of fragility in the current setup, indicating that the stock is not overly sensitive to negative news.
Management is on track to meet revenue guidance and improve adjusted EBITDA, which suggests a positive trajectory in profitability. However, the mixed progress on gross margins and a recent earnings miss introduce some near-term risks.
The thesis hinges on management's ability to meet guidance without further cuts, as well as external factors like potential Federal Reserve rate cuts and performance from key sector peers. These elements could significantly influence CRNC's market position.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improved outlook. There are no new threats identified that could weaken the thesis.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: Revenue falls below $305M in FY 2026
Over the next 1 to 3 years, CRNC's performance will depend on execution against its targets and broader market conditions. Not investment advice.