NICE Ltd. (NICE): A Bull Case Theory

We came across a bullish thesis on NICE Ltd. on Value investing subreddit by do_not_stress. In this article, we will summarize the bulls’ thesis on NICE. NICE Ltd.'s share was trading at $137.29 as of September 3^rd. NICE’s trailing and forward P/E were 16.31 and 10.13, respectively according to Yahoo Finance.

NICE Ltd. (NASDAQ: NICE) has emerged as an overlooked SaaS opportunity in a market that has shunned software stocks, particularly amid fears of AI disruption. The company provides customer support-as-a-service to some of the world’s largest enterprises under long-term contracts with high switching costs, making replacement by AI far less likely than perceived. In fact, NICE is well positioned to harness AI given its unique access to vast databases of customer interactions across calls, emails, and digital channels.

This foundation provides a competitive moat that enables NICE to integrate AI into its platform more effectively than new entrants. Customer feedback across platforms like G2 and Reddit indicates satisfaction with the product, often described as comparable to Oracle or Salesforce but with a more intuitive UI. Financially, the company has a strong balance sheet with ample cash and little debt, alongside an $800 million buyback program that is accretive at current depressed valuations. NICE generates ~$792 million in TTM EBITDA, trading at roughly 10x EBITDA and 3x sales against a market cap of $8.5 billion.

Concerns remain over modest projected growth of ~7% annually, below software investor expectations, though management has a history of outperforming guidance. Leadership changes add uncertainty, with the new CEO from SAP experienced in enterprise software but less technical, leaving questions on AI execution. However, NICE’s $955 million acquisition of Cognigy demonstrates a clear push into AI-powered customer engagement. With the stock at $136, well below analyst targets of $200–$268, the setup offers meaningful upside with limited downside.

Previously we covered a bullish thesis on NICE Ltd. by Relevations in Jan 2025, which highlighted its AI-driven CX leadership, international growth potential under new CEO Scott Russell, and strong positioning against larger competitors. The company’s stock has depreciated about 17% since our coverage as leadership concerns weighed on sentiment. The thesis still stands as NICE’s AI resilience remains intact. do_not_stress shares a similar but emphasizes valuation appeal and buybacks.

NICE Ltd. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held NICE at the end of the first quarter which was 28 in the previous quarter. While we acknowledge the potential of NICE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.