Director - Customer Success

Has Nice turned a corner? Nice CEO Scott Russell credit: Nice 29 Sep, 2026 13:56 A 40% rally since its June low, the possible sale of the Actimize division, and apparently successful adoption of AI, leave analysts optimistic. For several years now, Nice (TASE: NICE; Nasdaq: NICE) has underperformed the market. In three of the past four years, the technology company's share price has fallen by double-digit percentages, and since the beginning of 2026 the return is zero. All the same, since its latest low. in June, it has climbed by more than 40%, and the question arises whether the battered stock has finally changed direction. Nice, headed since the beginning of 2025 by Scott Russell, provides customer relations management and risk management software. In 2021, its market cap reached $20 billion, and for a while it was Israel's most valuable company, but it's along way from that today. Its current market cap is $6.6 billion, and it is not even among the ten largest Israeli companies by that measure. The weakness in the share price began with mounting fears of competition in Nice's market (particularly from Microsoft), and continued with the departure of the company's previous CEO Barak Eilam. This year, the "SaaSpocalypse" struck, the decline in software stocks because of fears that the development of AI would harm the sector. Advanced AI models, it was feared, were liable to damage the business models of companies like Nice that provide cloud-based software services based on payment per number of users, and would perhaps render their activity altogether redundant. That fear started to dissipate somewhat in recent months, and stocks that had fallen at the beginning of the year rose, which of course helped to change sentiment towards Nice. Another substantial factor that apparently had a positive impact on the stock was reports that Nice was trying to sell its financial risk management activity, which in effect means subsidiary company Actimize. Nice paid $280 million to acquire Actimize in 2007. In 2025, its revenue from Actimize's area of activity was $485 million, 7% more than in 2024, and represented 16.5% of total revenue, with the business's operating profit reaching $167 million, 25.8% of total operating profit. Revenue growth in the second quarter was 6%, to $137 million. How much will Actimize fetch? A year ago, it was reported that Nice had hired the services of investment banks with the aim of selling Actimize. In recent months it has been reported that there are potential buyers, and that the price could reach $2.5 billion. Last week, however, Sky News reported advanced negotiations on a sale of Actimize to Canadian investment company Brookfield for $2 billion. Nice did not respond to the report. At first the report boosted Nice's share price, but it later fell back, apparently because the price reported was lower than expected. "Selling Actimize makes a lot of sense," says Sergey Vastchenok, managing director at Oppenheimer & Co. "Nice bought it nearly two decades ago, leveraged it well and expanded its market share - Actimize took market share chiefly from Oracle, and established itself as a leading, profitable player in its field. But it has almost no synergy with Nice's main activity. It's a matter of different kinds of customers and different developments. It has almost no cloud activity, because in the financial sphere there's a great deal of regulation and sensitivity, and enterprises are not rushing to implement cloud services. After it took market share, its growth stabilized, which is lower than Nice's average, even though it's more profitable." Analyst and investment manager Lio Vider, founder of investment consultancy Profit Multiplier, said last week, "It was reported in May that Nice had received five different offers for Actimize from three investment funds and two strategic entities, for no less than $2.5 billion. At that time, Nice was traded at 20% less than its current price." Vider estimated that the recent rises in the share price came against the background of information or speculation on the market that negotiations had made progress. He added, however, that the price tag reported by Sky News was lower than the level that had been spoken of until recently, "and that is for a profitable division that represents a substantial anchor and generates a significant slice of the company's operating profit." Vastchenok believes that, despite the low price, such a deal would be positive for Nice. "Nice is going in the direction of AI. It acquired Cognigy (a company that specializes in AI agents for customer service, S.H-B.), and is making good progress. According to the reports, a sale of Actimize will bring in $2 billion, and that reflects low multiples in software - a sales multiple of four and an operating profit multiple of twelve. It appears that the market thought that Nice could get more, but multiples are not high in today's traditional software market. "What's important is the focus, and after the sale of Actimize, Nice will be 100% focused on the call centers and AI activity, with an even stronger balance sheet, and it will be able to carry out further acquisitions to strengthen its position, and perhaps to distribute a dividend or buy back its shares." At the end of the second quarter, Nice had $355 million cash and no debt, after generating $123 million from regular activity in the quarter. Vastchenok adds another positive point about selling Actimize. "Without Actimize, Nice's growth profile will be better. It will present higher growth, and that is what's important for investors, and it will improve the way they regard the company." On the other hand, the profitability profile will be harmed. Vastchenok: "That's not a vulnerability at Nice, which is a large, well-run company capable of meeting targets. Even when it acquired loss-making companies it brought them up to its average, and I don't think it will have a problem in improving its rate of profitability. Especially as all the software companies are themselves using AI tools and thereby improving profitability." "The stock is underpriced" Do Nice shares represent an opportunity? Vastchenok thinks that Nice is greatly underrated. "Even after the rally in the stock it is still at low profit and EBITDA multiples, and the money it could receive from selling Actimize is equal to almost a third of its market cap. Today, people realize that SaaS companies will not become extinct, and Nice is becoming a significant player in AI, with ARR of $362 million from AI alone." In addition, he points out that there is also a recovery in Nice's specific market, UCaaS (Unified Communications as a Service). "The stock has recovered well from the low in June, but looking at the past twelve months it is still down 30%," says Vider. "At current price levels, the company is traded at a p/e ratio of just ten for the current year and only nine for the coming year, which is expected to be better from a business and financial point of view. In my view, this is a clear case of underpricing, stemming mainly from the market's fears of a slowdown in the rate of growth of the cloud activity (around 14%) alongside the growing uncertainty caused by the rising competition from new AI solutions constantly being introduced into the enterprise software area." In the first half of this year, Nice's net profit fell by 14.6% to $321 million (non-GAAP) following growth in investment, but earnings per share only fell by 9.2%, and according to Vider one should take into account that Nice's aggressive share buyback program moderates the effect of the decline in net profit on earnings per share. "Weighing up all the factors, in my view, the risk-reward ratio for an investment in Nice for the medium and long term clearly leans towards the positive side," Vider says. "The stock suits investors with patience and stamina who have confidence in the management's ability to undergo the business transition successfully and to navigate in the stormy waters of the artificial intelligence revolution." Published by Globes, Israel business news - en.globes.co.il - on September 29, 2026. You May Like

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