On Dec 21, 2013, Zacks Investment Research downgraded
VeriFone Systems Inc. (
to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
The downgrade primarily reflects VeriFone's weak fourth-quarter
2013 results. The company reported earnings of 13 cents
(including stock-based compensation), which missed the Zacks
Consensus Estimate by a nickel (27.8%).
Although VeriFone succeeded in beating the Zacks Consensus
Estimate for revenues, gross margin (contracted 310 basis points)
and operating profit (down 70.4%) suffered due to 11.5%
year-over-year decline in revenues and 28.1% increase in
VeriFone's guidance also failed to impress. Management forecasted
non-GAAP revenues to be in the range of $425.0 million-$430.0
million for the first quarter of fiscal 2014. This reflects an
almost-flat growth from $429.0 million reported in the year-ago
Management expects first-quarter non-GAAP earnings to be
approximately 26 cents per share, down from 40 cents in the
For fiscal 2014, non-GAAP revenues are expected to be in the
range of $1.77 billion-$1.80 billion, higher than $1.71 billion
reported in fiscal 2013. Operating expense is expected to
increase approximately 11.0% to $535.0 million. Earnings are
expected to be in the range of $1.35 to $1.40 per share.
The Zacks Consensus Estimate for the first quarter of 2014 has
declined 28.0% (7 cents) to 18 cents over the last 30 days.
The Zacks Consensus Estimate for 2014 decreased 20.5% (26 cents)
to $1.01 per share over the last 30 days. The Zacks Consensus
Estimate for 2015 dropped 17.9% (31 cents) to $1.42 per share
over the same period.
Other Stocks to Consider
Some better-ranked stocks in the financial transaction sector
Qiwi plc (
Heartland Payment (
Alliance Data (
. While Qiwi carries a Zacks Rank #1 (Strong Buy), both Heartland
and Alliance have a Zacks Rank #2 (Buy).
ALLIANCE DATA (ADS): Free Stock Analysis
HEARTLAND PAYMT (HPY): Free Stock Analysis
VERIFONE SYSTMS (PAY): Free Stock Analysis
QIWI PLC-ADR (QIWI): Free Stock Analysis
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