VeriFone Systems, Inc. (PAY) - Zacks #1 Rank Top Performers
OK, so Hypercom Corp. (HYC) recently rejected VeriFone Systems, Inc. (PAY) and its acquisition offer, but that's not going to keep PAY down!
At least it didn't on Wednesday, as the company made the Zacks #1 Rank Top Performers List with a gain of 6.6%. In addition, volume for VeriFone advanced more than 1.7 million, which is above the daily average of around 1.28 million.
Wednesday was a good day for the market as it recovered from a tough session on Tuesday. The Dow advanced by almost 1.2% and retook 11,000, while the S&P 500 and NASDAQ increased 1.05% and 0.84%, respectively.
Earnings estimates for VeriFone have been quiet of late, but retain sharp increases due to its solid fiscal third-quarter report in August. That quarter marked its third consecutive with a positive EPS surprise, not to mention the best revenue and non-GAAP earnings results in its history, and double-digit year-over-year revenue growth.
VeriFone is the global leader in secure electronic payment solutions. It provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets.
The company is part of the computer – integrated systems industry. There are 2 other names from this space on today's Zacks #1 Rank List: Concurrent Computer Corporation (CCUR) and PAR Technology Corporation (PTC).
No Thanks
Late last month, VeriFone offered to acquire all outstanding shares of electronic-payment software maker Hypercom for $5.25 per share. HYC rejected the offer for undervaluing its future prospects. (There was also some legal action regarding disclosure of the offer, but HYC recently withdrew the suit.) Learn a lot more on this situation by clicking: Hypercom Rejects VeriFone's Offer.
However, a lot of other companies have been saying yes to PAY of late, as the company has made several moves in recent weeks. VeriFone recently acquired 80% ownership of Italy's All Business Solutions. It also acquired encryption leader Semtek and assets for WAY Systems Inc. Just today, PAY announced a comprehensive strategic partnership with digital security company Gemalto; the deal includes pursuing opportunities to accelerate EMV payment adoption.
Earnings Estimates for VeriFone
The Zacks Consensus Estimate for this fiscal year, which ends this month, is $1.11 per share. That's unchanged in the past 30 days, but is up approximately 10% from 2 months ago.
Meanwhile, the Zacks Consensus Estimate for next fiscal year, ending October 2011, is $1.39 per share, suggesting year-over-year profit growth of 25%. This outlook is up nearly 14% in 2 months.
PAY isn't scheduled to report again until mid December. Right now, the Zacks Consensus Estimate for its fiscal fourth quarter is 32 cents per share, compared to 20 cents a year earlier. The guidance has moved higher by more than 14% in 2 months. It is also up a penny, or around 3.2%, in 30 days.
3 Straight Beats...and More
In its fiscal second quarter, PAY put together a positive earnings surprise of nearly 7.7%. This comes after surprises of more than 9% and more than 16% in its fiscal second and fiscal first quarters, respectively.
In fact, as the chart below shows, it has been almost 2 years since the company completely missed quarterly expectations. In the last 7 quarters, it has beat 5 times and matched twice.
Revenue grew by nearly 24% from last year, thanks to solid demand in North America and a strengthening business in Latin America.
VeriFone also raised its expectations for 2010. It now expects EPS of $1.26 to $1.27, compared to its previous outlook of $1.12 to $1.15. Revenue is now anticipated between $984 million and $989 million, instead of $960 million to $970 million. To learn more about this quarter, read VeriFone Beats Expectations.
CONCURRENT NEW (CCUR): Free Stock Analysis Report
HYPERCOM CORP (HYC): Free Stock Analysis Report
VERIFONE HLDGS (PAY): Free Stock Analysis Report
PAR TECH (PTC): Free Stock Analysis Report
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