NICE Ltd: Seeking Value While Riding The AI Wave

Key Rationale:
Profitable technology firm with a track record of commercializing AI. World leader in two industries primed for significant growth, with a comprehensive suite of products and a treasure trove of historical data for AI training. Solid Growth profile and five-star valuation make it an ideal GARP investment.

Company Profile:
A tech powerhouse that’s quietly revolutionizing customer engagement and financial crime solutions. NICE Ltd., together with its subsidiaries, provides cloud platforms for AI-driven digital business solutions worldwide. Nice is an enterprise software company that serves the customer engagement and financial crime and compliance markets. The company provides data analytics-based solutions through both a cloud platform and on-premises infrastructure. Within customer engagement, Nice's CXone platform delivers solutions focused on contact center software and workforce engagement management, or WEM. Contact center offerings include solutions for digital self-service, customer journey and experience optimization, and compliance. WEM products optimize call center efficiency, leveraging data and AI analytics for call volume forecasting and agent scheduling. Within financial crime and compliance, Nice offers risk and investigation management, fraud prevention, anti-money laundering, and compliance solutions. NICE Ltd. was founded in 1986 and is headquartered in Ra'anana, Israel.

Comments:

• One of the best available Ex-U.S. stocks.
  
• Narrow Moat, Exemplary Capital Allocation.
  
• NICE’s long-term vision aligns with the AI revolution.
  
• Recently beat on top-line and bottom-line estimates.
  
• Recently announced a New $500 Million Share Buyback Plan.
  
• 5-Star Valuation on Morningstar, NICE is trading at a 36% discount.
  
• Incessant selling is unwarranted and partially due to a CEO transition.
  
• Multiple industry analysts rank NICE as a major player with the best technology.
  
• Cloud Company with actual Profitable Growth, making NICE an intelligent investment in AI.
  
• Publicly traded since 1996, NICE is not some hot new flash-in-the-pan AI IPO, it's got staying power.
  
• CXone Mpower is the Ultimate CX-Aware AI Offering, Providing Continuous, Memory-Driven Human and AI Collaboration.
  
• They are developing a moat around their AI offering due to the sheer scale of the number of transactions they perform each month.
  
• Nice has strong user retention metrics, and cloud growth means greater recurring revenue.
  
  
• Cincinnati Emergency Communication Center Leverages NICE to Improve Operations.
  
• Italy’s Police Deploy NICE Inform at All Control Rooms Nationwide for Incident Intelligence.
  
• Named the Leader In 2024 IDC MarketScape for Contact Center as a Service Report.
  
• Named the Conversational Intelligence Market Leader in 2024 Opus Research Intelliview Report.
  
• Recognized as Category Leader in the Chartis 2024 CLM Solutions for Corporate and Investment Banking Vendor Landscape Report
  

Proprietary Scores:

• GreenBlue Cumulative Rank: 196/2982 (Lower = Better)
  
• GreenBlue Current Rank: 509/2982 (Lower = Better)
  
• GreenRed Current Rank: 348/499 (Lower = Better)
  
• Gurufocus Score: 95/100 (Higher = Better)
  
• Stellar Profitability, Growth, and Quality scores for a foreign company in GreenBlue (138, 488, and 233 out of 2982)
  

Competitors:

• CRM, INTU, NOW, CDNS, SHOP, ROP, ADSK, DOCU, GWRE, TWLO, FIVN, RNG
  

Risks:

• Foreign companies have embedded geopolitical risk.
  
• Larger AI competitors eat their lunch. Microsoft's push into the contact center will increase competition.
  
• Nice is undergoing a cloud transition, and the timing of legacy customer migration and degree of success on this front remains to be seen.
  
• Prior personal investments in software application companies have been very risky. Failed investments include FIVN, RNG, and TWLO.