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Upturn AI Summary - About
Cerence Inc(CRNC)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for CRNC
10/30/2026: CRNC (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Cerence Inc is a specialized software provider focused on artificial intelligence and conversational voice interfaces for the global automotive market. The company benefits from a deep-rooted position within vehicle cockpit production and a specialized focus that generic tech platforms sometimes lack. Its primary growth opportunity lies in successfully shifting its business model toward recurring cloud-based subscriptions and integrating generative AI into new vehicle designs. However, the company faces significant competition from large technology firms, cyclical automotive industry headwinds, and the execution risk associated with its business transformation. It may suit investors looking for exposure to automotive-tech growth who can tolerate volatility and follow technological adoption cycles closely.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Mixed fit | The company offers exposure to automotive AI growth, but the transition in business model introduces uncertainty. |
| Momentum investor | Weak fit | Momentum is often absent during company-wide strategic pivots and business model restructuring. |
| Value investor | Mixed fit | Valuation may appear attractive following significant pullbacks, but business quality consistency remains a concern. |
| Dividend investor | Weak fit | Cerence does not pay a dividend and focuses capital on growth and R&D. |
| Low-risk investor | Weak fit | High exposure to automotive production cycles and competitive pressure creates elevated volatility. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | High | The stock is highly sensitive to automotive industry sentiment and quarterly earnings performance. |
| Valuation risk | Medium | Determining value during a structural business model transition is inherently difficult for investors. |
| Competition risk (AI competition) | High | Large tech incumbents provide powerful, integrated alternatives that threaten Cerence's market share. |
| Business quality | Medium | The reliance on OEM sales cycles limits the ability to achieve high, predictable SaaS-like margins. |
| Dividend income | Low / none | The company does not provide income through dividends. |
| Execution risk | High | The company must successfully transition to recurring revenue while simultaneously upgrading technology to stay competitive. |
Price Behavior
Steady Uptrend
The stock demonstrates consistent and steady upward price momentum.
Highly Choppy
The stock has experienced frequent, large price swings that make its near-term movement less predictable.
Analysis of Past Performance
Type Stock | Historic Profit 19.27% | Avg. Invested days 28 | Today’s Advisory WEAK BUY |
Upturn Advisory Rating  | Upturn Advisory Performance  1.0 | Stock Returns Performance  2.0 |
| Profits based on simulation | Last Close 10/30/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 365.91M USD | Price to earnings Ratio - | 1Y Target Price 10.75 |
Price to earnings Ratio - | 1Y Target Price 10.75 | ||
Volume (30-day avg) 676.1K shares | Beta 3.05 | 52 Weeks Range 5.85 - 13.28 | Updated Date 11/01/2026 |
52 Weeks Range 5.85 - 13.28 | Updated Date 11/01/2026 | ||
Dividends yield (FY) - | Basic EPS (TTM) -0.36 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| License Fees | Upfront per-vehicle software delivery fees for Cerence Drive. | These are one-time payments from auto manufacturers when they ship a car. |
| Connected Services | Subscription-based cloud features for navigation and voice assistants. | This is the recurring revenue portion that investors want to see grow. |
| Professional Services | Custom engineering to integrate software into OEM hardware. | This covers project-based work that supports the core software implementation. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Valuation
Trailing PE - | Forward PE 44.25 | Enterprise Value 425.36M | Price to Sales(TTM) 1.18 |
Enterprise Value 425.36M | Price to Sales(TTM) 1.18 | ||
Enterprise Value to Revenue 1.37 | Enterprise Value to EBITDA 10.82 | Shares Outstanding 45.23M | Shares Floating 43.59M |
Shares Outstanding 45.23M | Shares Floating 43.59M | ||
Percent Insiders 2.44 | Percent Institutions 83.82 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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