Can Nice's AI-powered Fraud Prevention Platform Push the Stock Higher?

Nice NICE business unit, Nice Actimize, recently introduced the next-generation X-Sight ActOne, an advanced AI-powered platform designed to transform fraud and financial crime prevention.

Expanding on the robust and open architecture of X-Sight, the latest version integrates Agentic AI capabilities, orchestrating all financial crime workflows within a unified platform. By leveraging billions of daily financial transactions and real-world fraud insights, X-Sight ActOne enhances analytical precision and investigator efficiency. 

With its InvestigateAI feature, X-Sight ActOne proactively reduces investigation time by more than 50%, ensuring compliance, transparency, and automation while strengthening financial institutions’ ability to combat fraud and money laundering.

NICE Benefits From Expanding Portfolio

NICE shares have lost 7.2% in the year-to-date period, outperforming the broader Zacks Computer & Technology sector decline of 10.9%. The outperformance can be attributed to its diverse portfolio featuring solutions like Actimize, Evidencentral, CXone, and Inform Elite, which has been gaining popularity. 

Nice Price and Consensus

Nice price-consensus-chart | Nice Quote

Further strengthening its position in financial crime prevention, in January 2025, NICE Actimize, in collaboration with The Knoble, released the “Guide to Investigating Human Trafficking in Financial Crime,” which aims to help financial institutions detect and respond to suspicious human trafficking activities.

The company’s focus on its cloud offerings, particularly its CXone platform, has been a major growth driver. NICE saw impressive growth in cloud revenues, with a 24% year-over-year increase, amounting to $534 million in the fourth quarter of 2024. Cloud revenues represented a record 74% of total revenues. Growth was driven by the continued success of the company’s CXone Mpower platform and the increasing shift of large enterprise customers to cloud solutions.

The company saw an increase in the number of large enterprise customers, with over 400 clients now generating more than $1 million in annual recurring revenues in the fourth quarter of 2024. This growth reflects strong demand for its CXone Mpower platform, especially in large enterprises.

NICE Benefits From Expanding Clientele

The company’s diverse portfolio is helping it attract new customers. Its partnerships with AT&T and Microsoft MSFT have been a key catalyst.

A deepening partnership with Microsoft is noteworthy. The collaboration has led to the integration of NICE’s NTR-X Compliance Recording and Assurance Solution into the Microsoft Azure Marketplace, providing a robust, cloud-ready compliance platform within the NICE Compliancentral suite.

NICE Provides Strong 1Q25 Guidance

Nice’s efforts to enhance its client’s customer experience with its robust cloud solutions are expected to drive top-line growth. In 2025, the company anticipates 12% year-over-year growth in cloud revenues.

For the first quarter of 2025, the company expects non-GAAP revenues of $693-$703 million, indicating 6% year-over-year growth at the mid-point. The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $699.39 million, suggesting a 6.08% increase from the prior-year quarter’s actual.

Non-GAAP earnings are estimated to be $2.78-$2.88 per share, suggesting 10% year-over-year growth at the mid-point. The consensus mark for earnings is pegged at $2.84 per share, which remained unchanged in past 30 days. This indicates year-over-year growth of 10.08%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Hold Nice Stock for Now

Despite a strong pipeline of its solutions, NICE has been facing stiff competition from other industry players, such as Five9 FIVN and 8x8 EGHT, which are also making advancements in the customer experience market. This is expected to hurt the company’s top-line growth.

For instance, 8x8 has recently launched an 8x8 AI Orchestrator, enabling organizations to seamlessly manage AI bots across multiple vendors, enhancing customer experience and operational efficiency.

Five9 launched Spotlight for Five9 AI Insights, offering generative AI-powered insights, customizable metrics, and enhanced reporting capabilities to help businesses make data-driven decisions and improve customer interactions.

Nice currently carries Zacks Rank #3 (Hold), which suggests that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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