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Verifone Systems Is Expanding Its Presence in Europe

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Price movement

Verifone Systems (PAY) rose 1.6% to close at $17.75 per share during the fourth week of November 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.6%, 11.0%, and -36.7%, respectively, on November 25, 2016.

PAY is trading 7.8% above its 20-day moving average, 10.5% above its 50-day moving average, and 16.8% below its 200-day moving average.

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Related ETF and peers

The Schwab US Broad Market ETF (SCHB) invests 0.01% of its holdings in Verifone Systems. The YTD price movement of SCHB was 10.7% on November 25.

The market caps of Verifone’s competitors are as follows:

  • PayPal (PYPL) — $48.6 billion
  • Global Payments (GPN) — $11.1 billion
  • NCR Corporation (NCR) — $4.8 billion

Latest news on Verifone

In a press release on November 21, 2016, Verifone reported, “Verifone [PAY] announces the European launch of Verifone Engage with the all-in-one countertop solution, Verifone V200c, installed at Anne Rueschenschmidt, a boutique fashion retailer in Rheine in northern Germany. 

The release continued, “A key strategic milestone in building a commerce-enabled payment infrastructure in Europe Verifone Engage family of devices are now available to small- to medium-sized businesses [SMB] across Germany through InterCard, a leading network service provider [NSP] acquired by Verifone in 2015.”

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Performance of Verifone in 3Q16

Verifone Systems reported total 3Q16 net revenue of $488.1 million, a fall of 4.3% compared to its total net revenue of $509.9 million in 3Q15. Net revenues from its North America, Latin America, and Asia-Pacific segments fell 8.2%, 25.2%, and 6.4%, respectively, and net revenue from its EMEA (Europe, the Middle East, and Africa) segment rose 10.1% in 3Q16 compared to 3Q15.

PAY’s gross profit margin contracted 3.3% in 3Q16 compared to the prior year’s period. The company reported a litigation settlement and a contingency expense loss of $0.6 million in 3Q16.

Verifone’s net income and EPS (earnings per share) fell to -$31.1 million and -$0.28, respectively, in 3Q16, compared to $9.5 million and $0.08, respectively, in 3Q15. It reported non-GAAP (generally accepted accounting principles) EPS of $0.42 in 3Q16, a fall of 10.6% compared to 3Q15.

Verifone’s cash and cash equivalents fell 25.0%, and its inventories rose 41.2% in 3Q16 compared to 4Q15.

Projections

Verifone has made the following projections for 4Q16:

  • non-GAAP net revenue of $460.0 million
  • non-GAAP EPS of $0.28–$0.29

The company has made the following projections for 2016:

  • non-GAAP net revenue of $2.0 billion
  • non-GAAP EPS of $1.64–$1.65

Next, let’s discuss Hormel Foods (HRL).

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