Nice Propels Forward in Q2 With Leading Cloud Platform; Maintain $296 Fair Value Estimate

Narrow-moat Nice reported good second-quarter results that exceeded the top end of guidance and FactSet consensus for revenue and adjusted earnings per share. Management provided solid guidance for the third quarter and raised its full-year outlook, backed by stout demand for holistic cloud solutions accompanied by the firm’s demonstrated ability to drive profitability at scale. Management noted no change in buying behavior and is not seeing sales cycles elongate, which could pose a risk to second-half results should Nice begin to experience what many other enterprise software companies are already seeing. We balance these risks with encouraging near-term results and guidance and accordingly maintain our $296 fair value estimate. We find the negative reaction to good results as out of sync with no obvious weakness, and we view the shares as attractive.