Why the Market Overreacted to Nuance's Quarter

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Shares of Nuance Communications  dropped significantly after earnings, only to immediately recover most of those losses. Investors were rattled by the weaker-than-expected guidance as the voice recognition specialist transitions to recurring revenue sources. Judging by the quick recovery, it was a classic case of market overreaction.

In the following video, Fool contributor Evan Niu, CFA, and Eric Bleeker, CFA, discuss the pros and cons of Nuance, as well as its valuation relative to rival Google  in terms of free cash flow.

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The article Why the Market Overreacted to Nuance's Quarter originally appeared on Fool.com.

Eric Bleeker, CFA, has no position in any stocks mentioned. Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Google and Nuance Communications. The Motley Fool owns shares of Google and Nuance Communications. 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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