MICROS Systems, Inc. (MCRS): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


MICROS reported better-than-expected fourth-quarter results. Both revenues and earnings increased on a year-over-year basis. Revenues were aided by growth across all its business segments. Expansion of the company's software-as-a-service capabilities and increase in licensed software sales remain the growth catalysts, going forward. MICROS' diverse offerings and expanding client base have prompted Oracle to bid for the company. Impending investigations on the deal, however, remain an overhang. Nonetheless, MICROS faces competition from the likes of Square, Revel, Groupon and NCR, which provide mobile and tablet-based offerings to the hospitality sector that cannibalize MICROS' legacy POS workstations. Thus, we reiterate our Neutral recommendation on MICROS.


Founded in 1977, MICROS Systems Inc. (MCRS) is headquartered in Columbia. Formerly known as Picos Manufacturing Inc., the company changed its name to MICROS Systems Inc. in 1978. The company designs, manufactures, markets, and services enterprise information solutions for the hospitality and specialty retail industries.

The hospitality industry comprises lodging, table service restaurants, quick service restaurants, entertainment venues, business foodservice operations, casinos, transportation foodservice, government operations and cruise ships.

The specialty retail industry consists of retail operations, selling directly to consumers, including retailers of clothing, shoes, food, hardware, jewelry and other specialty items.

The enterprise information solutions comprise hotel information systems, restaurant information systems and specialty retail information systems.

The hotel information systems include property-based management systems (PMS), sales and catering systems, central reservation systems (CRS), customer information systems, revenue management systems and an Internet/Global Distribution System based hotel reservation service.

The restaurant information systems consist of hardware and software for point-of-sale (POS) and operational applications, a suite of back-office applications, including inventory, labor financial management and certain centrally hosted enterprise applications.

The specialty retail information systems comprise software for POS, loss prevention, web commerce applications, business analytics, customer gift cards, electronic payments and enterprise applications.

Apart from these, MICROS Systems offers an extensive array of other support services. These services include installation, operator and manager training, on-site hardware maintenance, customized software development, application software support, credit card software support, help desk, systems configuration, network support, consulting and software hosting.

MICROS operates in the United States/Canada, EAME (Europe, Africa and Middle East), the Pacific Rim and Latin America. The company reports under two segments the United States/Canada and International. By product mix, Service represented 67.5% of total revenue in fiscal 2013. Hardware accounted for 21.2% of total revenue and Software contributed the remaining 11.3%.

MICROS operates in a highly competitive environment. In the food and beverage marketplace the company faces competition from NCR, Panasonic, and Par Technology. In the hotel segment it faces competition from the likes of Agilysys and Multi-Systems. Some of the competitors in the retail segment comprise of companies such as Escalate Retail, Red Prairie, Oracle, and SAP.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: CRS , MCRS



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