Cerence Inc. : Close to new upside potential

07/02/2020 | 07:22am EST

Nicolas Aleksy

long trade Target price hit

Entry price : 41.68$ | Target : 49$ | Stop-loss : 34$ | Potential : 17.56%

Cerence Inc. is close to a major resistance level, whereby the breach of this level could be considered as a buy signal. This reflects our preferred scenario in light of the stock's current technical chart pattern. Investors have an opportunity to buy the stock and target the $ 49.

Summary

• In a short-term perspective, the company has interesting fundamentals.

Strengths

• For the last week, the earnings per share forecast has been revised upwards. According to recent estimates, analysts give a positive overview of the stock
• For the past twelve months, EPS forecast has been revised upwards.
• For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
• Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.

Weaknesses

• The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.
• The stock is currently in contact with a medium-term resistance that must be gotten rid of so as to resume the upward trend.
• Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.
• For the last twelve months, the trend in sales revisions has been clearly going down, which emphasizes downgraded expectations from the analysts.

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