4-Star Stocks Poised to Pop: Nuance Communications

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, speech-software specialist Nuance Communications (NAS: NUAN) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Nuance's business and see what CAPS investors are saying about the stock right now.

Nuance facts

Headquarters (Founded)Burlington, Mass. (1992)
Market Cap$6.1 billion
IndustryApplication software
Trailing-12-Month Revenue$1.26 billion
ManagementChairman/CEO Paul Ricci
CFO Thomas Beaudoin
Return on Equity (Average, Past 3 Years)0.4%
Cash/Debt$483.6 million / $859.4 million

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 5,620 members who have rated Nuance believe the stock will outperform the S&P 500 going forward. These bulls include All-Star DomJoao, who is ranked in the top 15% of our community, and mwlove.

A few months ago, DomJoao touched on the tailwinds working in Nuance's favor:

Strong player in interesting market. Immediate opportunities for transcription -- medical and focus groups for business. Also, consumer applications will grow as time goes on -- I know my calendar would be much more organized if I could just talk to it!

Over the next five years, in fact, Nuance is expected to grow its bottom line at a solid rate of 13% annually. That's faster than much larger broad-sense rivals including AT&T (NYS: T) (3.8%), IBM (NYS: IBM) (11.8%), and Microsoft (NAS: MSFT) (9.9%).

CAPS member mwlove expands on the Nuance outperform argument:

Nuan is getting ready to take off. ...They've digested a lot of purchases in the past year, and now it's time to deliver. Great products and thousands of patents make a wide moat. They are advancing on multiple fronts, and if they make a licensing deal with Apple's cloud service, they will be golden.

What do you think about Nuance, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackNuance?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Nuance, AT&T, Microsoft, and Apple, as well as creating a bull call spread position in Microsoft and Apple. The Fool owns shares of IBM, Microsoft, and Apple. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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