Nuance Communications Inc. (NUAN) – Bull Case Theory

We came across a bull case theory on Nuance Communications Inc. (NUAN) on Valueinvestorsclub authored by rjm59. We find articles on VIC thoroughly researched by aspiring analysts, who tend to think out of the box. Click here for the full article. Here is the summary:

NUAN is an American multinational computer software technology corporation. The Massachusetts-headquartered company is the premier provider of speech recognition and artificial intelligence for the medical industry for the purpose of clinical documentation. It also uses the same technology in the complex multi-disciplined Enterprise segment for call centers and security for customer such as test and authentication.

NUAN’s recently launched flagship new product Dragon Ambient Experience (DAX) could be the game changer. It is in direct competition with the world’s two current widely used voice to text technologies for clinical documentation – Dragon Medical and M*Model. Both products are well-integrated with EHR systems, wherein doctors can dictate part of the medical note instead of typing it. Dragon Medical uses NUAN’s Clinical Documentation Improvement (CDI), which automatically detects discrepancy or lack of clarity in the medical note and prompts a clarification from the doctor, reducing potential reimbursement rejections.

The software of DAX, on the other hand, directly captures the conversation between the doctor and patient, converts the conversation into transcription, and generates the note by itself for the HER system. The process leaves the doctor to only review and make any required edition to the note.

Despite a very wide use of Dragon Medical and M*Model, physicians are experiencing thin revenues. DAX could possibly provide cost-effective and time-efficient solutions to physicians and ease the pressures in their professional life. If implemented successfully, DAX has the potential to revolutionize the process of clinical documentation for large part of the health care market. DAX presently covers 10 specialties. NUAN is targeting to expand the coverage to 30 specialties over the next couple of years.

With an intended average price tag of $10,000 per physician, company can target over 80% of the physicians in the United States. NUAN estimates subscribers could see a 10x ROI on their investment. Considering the edge NUAN enjoys in technology, untapped healthcare sector, and competitive pricing, company’s stock is looking attractively priced here.

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