Cerence rises as RBC upgrades, citing 'more reasonable' expectations
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Cerence (NASDAQ:CRNC) shares rose on Thursday as investment firm RBC Capital Markets upgraded the software company, noting near-term expectations have become "more reasonable," even as challenges remain.
Analyst Joseph Spak raised his rating on Cerence (CRNC) shares to sector perform from underperform, but lowered the price target to $27 from $28, while also tweaking his earnings estimates.

"Near-term expectations seem more reasonable to us and the current level seems to better encapsulate mid-term negative estimate revisions," Spak wrote in a note to clients, adding that more challenges in the mid-term remain and the company's upcoming investor day may provide new targets. 
Cerence (CRNC) shares rose 1% to $26 in premarket trading.
The firm estimates third-quarter revenue will be $95M, slightly above estimates of $92M, including $20M in sales from its Connected Services division. 
For the full-year, RBC estimates Cerence (CRNC) will generated around $376M in revenue, in line with the company's forecast of $365M-$385M and near the $371M consensus.
However, there are still some mid-term concerns, as Cerence (CRNC) recently said some of its customers converted their variable long-term contracts to minimum purchase commitment deals and the company is increasingly going up against Google (GOOG) (GOOGL) and Apple (AAPL) in connected car software with Google Automotive Services and CarPlay, respectively. 
"[P]art of CRNCâs story is offering more features and services and to the extent players like Apple and other tech giants get more integrated in the vehicle, the less likely an automaker may be willing to pay for such a feature that may not get a lot of native use," Spak added.

Analysts have been positive on Cerence (CRNC). It had an average rating of BUY from Wall Street analysts, while Seeking Alpha authors are less positive on it and rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates CRNC a STRONG SELL.