When you hear about activist investor activity from Carl Icahn and Icahn Enterprises L.P. (NASDAQ: IEP) these days, you might generally think of Netflix Inc. (NASDAQ: NFLX) or Apple Inc. (NASDAQ: AAPL). The Dell deal is history, but there is another activist effort that is so far not working out well for him nor for his investors. This is the case of Nuance Communications Inc. (NASDAQ: NUAN).

Nuance is the technology behind Siri for the Apple Inc. (NASDAQ: AAPL) iPhones and iPads. Icahn has taken two board seats via Brett Icahn and David Schechter. The Icahn entities also own somewhere around 52,437,750 voting shares, worth almost a 17% stake. As part of the Icahn deal to get two board seats, the group agreed not to acquire more than 20% of the voting power of Nuance.

What makes Nuance so interesting is not just Siri, and not just the Dragon dictation software for speech-to-text. Nuance has a shot at being the voice recognition software provider for just about anything and everything in the world that could require speech recognition. Ditto for text-to-speech back to consumers. It is the leader in the field.

Unfortunately, Nuance’s stock price is trading as though there is something far worse than the numbers and promises might hint at. The stock’s 52-week low is $16.18, and the current price of $16.40 is down from a 52-week high of $24.85. The stock also peaked at nearly $30 in early 2012. So much promise, yet so much disappointment.

The company is expected to earn $1.32 per share in 2013 and $1.41 per share in 2014, giving it a blended forward earnings multiple of only about 12 times the consensus. It also trades at only about 2.5 times expected sales.

Unfortunately that growth has slowed down handily. Nuance also has substantial long-term debt. It is going to be a harder turnaround than other Icahn rides, but this is the leader in its field. If you want a piggy back ride on Mr. Icahn’s back that has not risen under his efforts yet, Nuance is still at depressed prices.

As far as the $16.40 share price today, the consensus analyst price target is closer to $21.00.

Icahn cleaned up on his Netflix Inc. (NASDAQ: NFLX) and he is up on his Apple Inc. (NASDAQ: AAPL) bet so far. Netflix was lightened up recently because the investment was up 300% or 400%, and we have to be patient for the Apple impact to see if he can force Tim Cook into a $150 billion buyback. The verdict remains out on Nuance.

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