NICE Systems , which provides customer experience and anti-fraud and risk management software, is poised to rally in the coming year, according to Piper Sandler. The firm upgraded shares of the company to overweight from neutral and boosted its price target to $227 from $222, implying a more than 14% upside from where shares traded at Friday’s close. Shares rose 3% on the news. The upgrade comes as Piper Sandler sees NICE gaining new clients and building revenue in the coming year as its main competitors struggle. Piper Sandler also sees the second half of 2023 as a potential recurring revenue inflection point. “We also note FCC spin-out potential over the medium term appears to be increasing in probability but is not our base case,” analyst James Fish wrote in a Monday note. “NICE’s valuation is ‘not a steal’ on current estimates, but with these positive dynamics & valuation having come in, we have a more favorable view at these levels.” Nice win rates NICE is well-positioned to win seats in the contact center as a service space. With win rates stabilizing in 2022, Nice could reach more than 1 million seats in 2023 and potentially hit 1.7 million by 2026, per Piper Sandler estimates. “With incumbents’ struggles, we believe fundamental upside for the stock could come from increased win-rates of available seats up for grabs over the medium term,” said Fish. In addition, NICE has a more resilient installed base than its peers due to its high exposure to financial services, which should help its momentum going into 2023. Cloud renewals should also become most of the revenue growth and recurring revenue in 2023, leading to stable growth rates in the second half of the year and pushing better operating leverage. There’s also potential in the company’s robot process automation software as well as it is a top priority for customers when choosing a software. NICE also offers a full suite of products that customers want, according to Piper Sandler. There may also be a potential win in the future with NICE’s financial crimes and compliance business, which represents roughly 18% of revenue. “Lastly, while a potential spin-out or sale of the FCC business shouldn’t be thought of as the ‘base case,’ management’s more recent public commentary suggests this could be a medium-term possibility & modest catalyst,” Fish said.