Assessing NICE After a 49% Slide and AI Cloud Expansion in 2025
- If you have been wondering whether NICE is a beaten down bargain or a value trap, you are exactly the kind of investor this breakdown is for.
- Despite a long slide that has left the stock down 49.5% over the last year and 45.1% year to date, the recent 17.8% drop over the past month has sharpened the market debate around its risk and recovery potential.
- Recent headlines have focused on NICE's push deeper into cloud based customer experience platforms and AI driven analytics, as it looks to defend and grow its share in a fiercely competitive software space. At the same time, analysts and investors have been reassessing how much of that long term growth potential is already, or not yet, reflected in the share price.
- Even after that drawdown, our checks suggest NICE appears undervalued on 5 out of 6 metrics, giving it a valuation score of 5/6. In this breakdown, we walk through what that means across different valuation methods, then finish with an additional way to think about what the stock may be worth.
Find out why NICE's -49.5% return over the last year is lagging behind its peers.
Approach 1: NICE Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and discounting them back to today, adjusting for risk and the time value of money.
For NICE, the model starts with last twelve months free cash flow of about $684 million and uses analyst forecasts for the next few years, then extends those trends further into the future. By 2029, free cash flow is projected to reach roughly $964 million, with additional years extrapolated by Simply Wall St to reflect moderating, but still positive, growth as the business matures.
Adding up all those projected cash flows and discounting them back to today gives an estimated intrinsic value of about $676 per share. Compared with the current share price, this implies the stock is trading at roughly a 49.2% discount to its DCF based value. This suggests the market is pricing in far weaker long term cash generation than this model assumes.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests NICE is undervalued by 49.2%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.
Approach 2: NICE Price vs Earnings
For profitable companies like NICE, the price to earnings ratio is a useful way to see how much investors are paying for each unit of current earnings. It ties the share price directly to the company’s bottom line, which makes it a natural cross check against the cash flow based valuation.
What counts as a fair PE depends on how fast earnings are expected to grow and how risky that growth looks. Higher growth with manageable risk usually justifies a higher PE, while slower or more uncertain growth deserves a lower one. NICE currently trades on about 11.65x earnings, which is well below both the Software industry average of around 27.27x and the broader peer group average of roughly 46.29x.
Simply Wall St’s Fair Ratio framework estimates what a more appropriate PE for NICE should be, given its earnings growth outlook, profit margins, risks, industry and market cap. For NICE, that Fair Ratio comes out at about 16.20x, which sits between the industry level and the stock’s current multiple. Because this approach is tailored to the company rather than generic peer comparisons, it is a more precise guide and suggests the present 11.65x PE appears attractive relative to its fundamentals.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your NICE Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of a company with the numbers behind it.
A Narrative is your story about NICE, captured as assumptions for future revenue, earnings and margins, which then flow through to a financial forecast and ultimately to a fair value estimate.
On Simply Wall St’s Community page, Narratives are an easy, guided tool used by millions of investors to turn their qualitative view, like confidence in AI driven growth or concern about margin pressure, into a quantified outlook.
Once you have a Narrative, you can compare its Fair Value to the current share price to help inform whether NICE might look like a buy, a hold, or a sell, and that view updates dynamically as new news, earnings or guidance are released.
For example, one optimistic NICE Narrative on the platform currently estimates fair value at about ₪750 per share, while a more conservative Narrative, based on slower growth and lower margins, sits much closer to today’s market price, illustrating how different perspectives can coexist and be tracked side by side.
Do you think there's more to the story for NICE? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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