UPDATE: Barrington Research Initiates USA Technologies at Outperform on Multiple Growth Drivers

In a report published Monday, Barrington Research analyst Gary Prestopino initiated coverage on USA Technologies USAT with an Outperform rating and $3.00 price target.

In the report, Barrington Research noted, “USA Technologies (USAT) is an emerging growth company that provides technology-enabled solutions that facilitate electronic payment transactions within the unattended Point of Sale (POS) market through its ePort Connect core service offering. Connections to the ePort connect service for USAT have increased to 196,000 in March 2013 from 73,000 in March 2010 representing a CAGR of 39%. USAT estimates its addressable market in annual transaction dollars in the U.S. unattended vertical market at $119 billion with cashless payments at early stages of adoption throughout the sector. USAT's current customer base has over two million machines in the U.S. with total connections of 196,000 indicating slightly less than 10% penetration for electronic payment capabilities across the enterprise. Secular growth drivers for USAT in the unattended POS market include the shift toward electronic payments, the increase in owner/operator demand for electronic functionality including networked assets for M2M (machine-to-machine) technology and the adoption of mobile payment capabilities in the market.”

USA Technologies closed on Friday at $1.90.