Latest Ratios: P/E Ratio -24.0x · EV/EBITDA 25.8x · ROE -12.8%. (2016–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $466M | $538M | $131M | $819M | $617M | $3.8B | $1.8B | $628M | — | — | — |
| Enterprise Value | $612M | $684M | $305M | $1.0B | $809M | $3.9B | $1.9B | $628M | — | — | — |
| P/E Ratio → | -23.98 | — | — | — | — | 82.15 | — | 6.27 | — | — | — |
| P/S Ratio | 1.85 | 2.14 | 0.40 | 2.78 | 1.88 | 9.75 | 5.38 | 2.07 | — | — | — |
| P/B Ratio | 2.95 | 3.57 | 0.93 | 1.18 | 0.87 | 3.66 | 1.86 | 0.59 | — | — | — |
| P/FCF | 9.95 | 11.49 | 10.75 | 345.06 | — | 60.57 | 69.06 | 7.51 | — | — | — |
| P/OCF | 7.61 | 8.80 | 7.63 | 109.25 | — | 50.76 | 39.75 | 7.13 | — | — | — |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 2.72 | 0.92 | 3.42 | 2.47 | 10.17 | 5.86 | 2.07 | — | — | — |
| EV / EBITDA | 25.85 | 28.90 | 5.35 | 1332.48 | 12.99 | 41.30 | 28.16 | 9.65 | — | — | — |
| EV / EBIT | 46.62 | 488.06 | — | — | — | 63.24 | — | 56.14 | — | — | — |
| EV / FCF | — | 14.62 | 24.99 | 424.33 | — | 63.16 | 75.29 | 7.51 | — | — | — |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 72.1% | 72.1% | 73.0% | 65.7% | 66.9% | 70.6% | 63.6% | 62.6% | 66.3% | 68.8% | 67.6% |
| Operating Margin | 5.2% | 5.2% | 14.0% | -5.2% | 11.7% | 17.0% | 11.8% | 11.9% | 19.4% | 27.1% | 23.5% |
| Net Profit Margin | -7.4% | -7.4% | -177.4% | -19.1% | -94.8% | 11.9% | -5.5% | 33.1% | 2.1% | 19.3% | 16.5% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | -12.8% | -12.8% | -140.7% | -8.0% | -35.6% | 4.6% | -1.8% | 9.7% | 0.6% | 4.7% | 3.5% |
| ROA | -2.8% | -2.8% | -58.8% | -4.3% | -20.6% | 2.7% | -1.2% | 7.0% | 0.4% | 3.6% | 2.7% |
| ROIC | 3.2% | 3.2% | 5.8% | -1.3% | 2.7% | 4.3% | 2.7% | 2.6% | 4.1% | 5.0% | 3.7% |
| ROCE | 2.6% | 2.6% | 5.7% | -1.3% | 2.8% | 4.3% | 2.7% | 2.8% | 4.3% | 5.4% | 4.1% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 1.53 | 1.53 | 2.09 | 0.42 | 0.40 | 0.28 | 0.31 | — | — | — | — |
| Debt / EBITDA | 9.73 | 9.73 | 5.18 | 382.71 | 4.61 | 3.04 | 4.30 | — | — | — | — |
| Net Debt / Equity | — | 0.97 | 1.23 | 0.27 | 0.27 | 0.16 | 0.17 | 0.00 | 0.00 | 0.00 | 0.00 |
| Net Debt / EBITDA | 6.18 | 6.18 | 3.05 | 248.91 | 3.08 | 1.69 | 2.33 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt / FCF | — | 3.12 | 14.24 | 79.27 | — | 2.59 | 6.23 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest Coverage | 0.14 | 0.14 | -45.57 | -1.46 | -12.81 | 4.45 | -0.01 | — | — | — | — |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.84 | 1.84 | 1.22 | 1.52 | 1.55 | 1.74 | 1.25 | 0.72 | 0.68 | 0.86 | 0.74 |
| Quick Ratio | 1.84 | 1.84 | 1.22 | 1.48 | 1.55 | 1.74 | 1.25 | 0.72 | 0.68 | 0.86 | 0.74 |
| Cash Ratio | 0.86 | 0.86 | 0.59 | 0.75 | 0.78 | 0.96 | 0.74 | — | — | — | — |
| Asset Turnover | — | 0.40 | 0.47 | 0.23 | 0.25 | 0.23 | 0.20 | 0.20 | 0.20 | 0.18 | 0.16 |
| Inventory Turnover | — | — | — | 14.57 | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | 85.44 | 69.10 | 75.94 | 50.17 | 42.95 | 55.08 | 79.17 | 94.99 | 110.40 | 95.36 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — | 8.6% | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — | — | — | — | — | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | — | — | — | — | — | 1.2% | — | 15.9% | — | — | — |
| FCF Yield | 10.1% | 8.7% | 9.3% | 0.3% | — | 1.7% | 1.4% | 13.3% | — | — | — |
| Buyback Yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | — | — | — |
| Total Shareholder Yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 8.6% | 0.0% | — | — | — |
| Shares Outstanding | — | $43M | $42M | $40M | $39M | $39M | $36M | $36M | $36M | $36M | $36M |
Cyclical automotive production dependence
According to current market data, Cerence trades at a forward P/E of 14.94, which, when contrasted with its negative TTM P/E of -24.67, suggests that investors are pricing the company as a distressed legacy supplier rather than a high-growth participant in the automotive AI software sector.
The valuation gap relative to broader software peers appears to stem from the market's skepticism regarding the company's ability to transition from lumpy, fixed-price license royalties to a stable, recurring subscription model. This pricing implies that the market is heavily discounting future growth, potentially ignoring the defensive moat provided by deep integration into vehicle CAN bus systems.
As reported in financial statements, the company's ROIC has fluctuated wildly, swinging from 10.0% in 2026Q1 to -0.7% in 2026Q2, which indicates that Cerence is currently struggling to compound capital effectively while navigating a difficult transition in its core automotive software business model.
The inconsistency in returns on invested capital suggests that the company's heavy R&D spending is not yet yielding predictable margin expansion. Investors should monitor whether these returns can stabilize as the company shifts its focus toward connected services, which may require a different capital intensity profile than legacy license-based revenue.
Based on recent quarterly filings, the company's DSO has shown significant variance, ranging from 40 to 114 days over the last ten quarters, which suggests that Cerence faces ongoing challenges in managing customer payment cycles and aligning its billing with the complex procurement schedules of global automotive OEMs.
The lack of a consistent cash conversion cycle highlights the operational friction inherent in the company's reliance on large, project-based contracts. This inefficiency may be masking the true underlying demand for its software, as the timing of revenue recognition often diverges from the actual delivery of value to the customer.
According to the provided balance sheet data, the debt-to-equity ratio reached 1.18 in 2026Q2, and interest coverage has frequently dipped into negative territory, indicating that the company's ability to service its obligations is highly sensitive to the cyclicality of its automotive revenue streams.
While the current liquidity position provides a temporary buffer, the reliance on debt to fund operations during periods of revenue contraction warrants close monitoring. The company's leverage profile appears vulnerable to any further delays in OEM software-defined vehicle programs, which could constrain future financing flexibility.
The price-to-earnings ratio is frequently misapplied to Cerence, as it fails to account for the company's lumpy, fixed-price license accounting, which can artificially inflate or deflate GAAP earnings in any given quarter, thereby obscuring the true underlying cash-generative capacity of the business model.
Analysts should prioritize free cash flow and total contract value (TCV) over P/E multiples to better assess the company's health. Relying on P/E in this context risks misinterpreting accounting-driven earnings volatility as a fundamental shift in the company's competitive position or long-term earning power.
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Quick answers to the most common questions about buying CRNC stock.
Cerence Inc.'s current P/E ratio is -24.0x. The historical average is 44.2x.
Cerence Inc.'s current EV/EBITDA is 25.8x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 21.1x.
Cerence Inc.'s return on equity (ROE) is -12.8%. The historical average is -17.6%.
Based on historical data, Cerence Inc. is trading at a P/E of -24.0x. Compare with industry peers and growth rates for a complete picture.
Cerence Inc. has 72.1% gross margin and 5.2% operating margin.
Cerence Inc.'s Debt/EBITDA ratio is 9.7x, indicating high leverage. A ratio above 4x may signal elevated financial risk.