Our 1-year target price of $209 is based on 3.8x FY28E 80% rev growth/FY27E 20% OPM with 6.1% FY28 rev growth, FY27E NG OPM 32% and FY27E rev of $3.35B. We compute future EV of $12.7B and use future cash, debt and share count assumptions to arrive at future equity value per share of $247. We then discount this back at 13% cost of equity to a year from now to arrive at our 12-month target price of $209.

Risks to NICE not achieving our target price include: 1) Generative AI CCaaS tools may reduce the need for as many call center agents over time. Given NICE is primarily a seat-based model the contraction in agent count needs to be offset by high-priced interactions based off consumption pricing 2) NICE’s legacy Customer Engagement and Public Safety and Security business may be weighted by lumpiness associated with perpetual license business model. 3) We view the Actimize/FC&C business as susceptible to potential de-regulation in the financial sector.