U.S. Markets closed

How Did Nuance Communications Perform in Comparison to Its Peers?

Gabriel Kane

Nuance Communications Reports Mixed Fiscal 4Q15 Earnings

(Continued from Prior Part)

Nuance Communications and its peers

In this article, we’ll compare Nuance Communications with its peers and a few ETFs that invest in it:

  • The PBV (price-to-book value) ratios of Nuance Communications (NUAN), HP Development Company (HPQ), and Xerox (XRX) were 2.3x, 0.89x, and 1.2x, respectively, as of November 16, 2015.

  • The price-to-sales ratios of NUAN, HPQ, XRX, and West Corporation (WSTC) were 2.7x, 0.23x, 0.59x, and 1.2x, respectively.

Thus, Nuance Communications has outperformed its peers based on PBV and price-to-sales ratios.

ETFs that invest in Nuance Communications

The PowerShares Dynamic Software Portfolio ETF (PSJ) invests 2.7% of its holdings in NUAN. The ETF uses a quantitative model to choose US software companies across the market cap spectrum.

The Robo Global Robotics and Automation ETF (ROBO) invests 1.1% of its holdings in NUAN. The ETF tracks a global index of companies involved in robotics and automation.

The iShares S&P North American Technology-Software ETF (IGV) invests 0.89% of its holdings in NUAN. The ETF tracks a market cap–weighted index of US and Canadian software companies.

Comparing Nuance Communications and its ETFs

Now let’s compare NUAN with the ETFs listed above:

  • The YTD (year-to-date) price movements of NUAN, PSJ, ROBO, and IGV were 19.5%, 7.1%, -7.8%, and 10.1%, respectively, as of November 13, 2015.
  • The PBV ratios of NUAN, PSJ, ROBO, and IGV were 2.3x, 4.3x, 2.0x, and 4.9x, respectively.

According to the above findings, these ETFs have mostly outperformed Nuance Communications based on PBV ratio. However, Nuance Communications is ahead of these ETFs based on price movement.

Browse this series on Market Realist: