Analysts Say NICE's Cloud Targets Look 'Aggressive'

NICE Ltd. (NASDAQ:NICE) is one of the AI Stocks Investors Are Watching. On December 23, Piper Sandler reiterated its Neutral rating on the stock with a $122.00 price target. Firm analysts remain cautious on Cloud ramp feasibility amid pressure on mid-term outlook.

In an investor note, analysts at the firm questioned how NICE can achieve its aggressive Cloud targets for 2028 without major drivers such as new customers, and mergers and acquisitions.

“Is the Cloud ’28 Target Aggressive? Following NICE’s recent analyst day, many have wondered how NICE can achieve the Cloud targets. We took the time to back into what's implied across the three drivers of new-only, expansion, and M&A. Given this company's history, we expect a combination of the drivers would be required, including further M&A like the acquisition of Cognigy earlier this year.”

The recent acquisition of Cognigy does give NICE a foothold in conversational AI, the firm noted. However, private competitors such as Sierra.AI and Decagon have stronger momentum. This is why investors remain cautious for now.

“All of these scenarios also embed that the expansion rate comes in better than PSC and current levels, which should be interpreted to being ‘aggressive’. NICE has many options to create shareholder value (see ‘Play is Under Review’), including divesting / selling the FCC business, and we expect the stock to remain pressured given the view around the mid-term targets.”

NICE Ltd. is a technology company that provides AI-powered cloud platforms.

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