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Nuance Communications: An End to Acquisitive Growth

by: Ketul Kirtikumar September 10, 2008 | about stocks: MSFT / NT / NUAN    

Ketul Kirtikumar

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This article has 8 comments:

  •  
    Sep 05 10:47 AM
    Whenever I see an article such as this one, that is written very methodically and craftily in one direction against a company such as Nuance with an impressive growth track -- and in contrast to the prevalent and postive opinions of analysts covering and researching the company -- I assume that it has been produced on behalf of and/or with financial support from some interested party or fund, seeking to benefit from the temporary movement of the stock caused as a result; I am all the more suspect when such article 'coincidentally' appears on already high jitter days in the market. However surprised I am not.
    Reply
  •  
    Sep 05 11:09 AM
    The author of the blog is a joke ! He has no clue about Nuance business. Clearly he defends some short interests or anybody who would like to see Nuance perceived negatively.

    Do your own due diligence and you will see that Nuance is one of the greatest success stories in software and has more potential than ever.

    Good luch to the fool who wrote the blog, he is playing with fire.
    Reply
  •  
    Sep 05 11:25 AM
    I disagree with jacob1. The author acknowledges Nuance's impressive growth track, but offers strong arguments why that growth rate is in jeopardy. The company does have very good technology, but when you own the lion's share of the market it's very difficult to continue to grow rapidly unless that market is also expanding rapidly. I'm not seeing signs of rapid growth in Nuance's markets, and apparently neither is this author. And I applaud his efforts to methodically present his arguments.
    Reply
  •  
    Sep 05 12:14 PM
    I also agree with the author in general, although I would have to question some of his numbers and charts, like how does he consider Aspect to be a visionary when they are a teir 1 leader in Callcenters.
    Reply
  •  
    Sep 05 12:14 PM
    Be careful or the black helicopters of the vast short-selling conspiracy will find you.
    Reply
  •  
    Sep 06 09:47 AM
    If this author's paragraph on the healthcare industry is any indication, there is no reason to listen to anything else he says. For example, he states the following as if it really is a problem: "Owing to low barriers to entry and no sustainable competitive advantage, the medical transcription industry is highly fragmented with more than 100 medical transcription companies competing in a mature market." If he knew anything about eScription and Dictaphone, he would know that they don't *care* who is the medical transcription company, and leave those decisions to the hospital: eScription, for instance, primarily makes its money by taking a pct of each line transcribed, without regard to who transcribed it.

    Then he says: "eScription continues to use its own speech-to-text technology while Focus has not been integrated with Dictaphone so far. " First, Focus has been using Dictaphone technology (or has been "integrated" with Dictaphone) for over a year. Second, he seems to find it a problem that "eScription continues to use its own speech-to-text" technology. There's a reason for that: it's better than anything else out there. It has a higher pct of doctors recognized than any other MT Software Company, no requirement for doctors to "train" the software, *much* better formatting of recognition for use by transcriptionists (see www.escription.com/pro...).

    I suspect that everything else this author says is based on similarly flimsy understanding of the company, and would have to wonder what his motivations are.

    Reply
  •  
    Sep 06 05:01 PM
    While I agree with the author's conclusion that NUAN is a good short, I don't necessarily agree with his logic or that of people who have commented on his post. The primary reason I think it is overvalued is because the company barely generates any economic/GAAP profits. The proforma figures they put out exclude a huge amount of stock comp. Ignore this at your own peril - remember that management will be regularly and surely dumping more and more stock into the market.
    Reply
  •  
    Sep 07 02:19 AM
    Whenever I see any article with a random magic quadrant I stop reading :) There are too many nice pictures, the author must be trying very hard to sell something.

    I'll celebrate the day Nuance stops acquiring and starts making a profit. But short it at your own peril.
    Reply
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