Boston, MA 03/14/2014 (wallstreetpr) – VeriFone Systems Inc (NYSE:PAY) is a provider of payment technology and a turnaround stock. In this position, the company isn’t actually getting judged on the basis of what it has already achieved, but what it can achieve going forward. In other words, investor should be interested to find out if the turnaround is taking shape.
The new management in place is already doing quite well and there are remarkable developments that one can point out, for instance the gross margin that has been improved annually and sequentially by 230 and 120 basis points respectively. It means that although the company still has more work to do in order to report consistent growth numbers, there are good reasons to give the benefit of doubt to the respected management team in place.
VeriFone Systems Inc (NYSE:PAY) is fighting many wars in that while it is trying to undo the problems that dogged it in 2012 and mid-2013, it also has a rival to chase and exceed in terms of market share. That rival is INGENICO S.A. (OTCMKTS:INGIY).
Latest performance score card
VeriFone Systems Inc (NYSE:PAY) reported fiscal 2014 first quarter data which showed its revenue improved 2 percent to $437 million, thus beating the estimated $429 million for the quarter. Earnings per share came in at $0.31, ahead of the expected $0.27.
The company’s management expressed their satisfaction with the results and stated that they were a clear indication that their new initiatives towards attaining growth were paying off. The company rolled out a number of new initiatives in the first quarter which included taxi-top ads in New York City and mobile ECR system in Turkey.
Outlook
For a turnaround stock like VeriFone Systems Inc (NYSE:PAY), outlook is a key indicator of how things are unfolding as it helps investors to pinpoint what the management is uttering. Thus, in full-year 2014, VeriFone Systems Inc (NYSE:PAY) hopes to achieve EPS of $1.40, which is a penny over the estimates. The company expects revenue to come in the range of $1.78 – $1.81 billion, in-line with $1.79 billion that is expected.
In view of the improving performance and the upbeat guidance for the year, rating firms can be seen upgrading their recommendation of the stock to reflect the current reality.
