Verifone Systems Inc.'s earnings beat consensus estimates, Wall Street expects global growth

On Tuesday Verifone Systems Inc.

released their first quarter 2015 earnings that beat analyst expectations. The electronic payment systems provider reported EPS of $0.44 beating estimates of $0.41 and earned revenue of $486 million, up 11 percent year over year. Paul Galant, Chief Executive Officer of Verifone Systems Inc. said, "I'm pleased with our performance in Q1, and the team's accomplishments. We again exceeded our financial guidance despite foreign exchange and macro-economic related headwinds. We are successfully executing on our transformation, better serving our clients, and capitalizing on opportunities in key markets. At the same time, we are investing in delivering important new products for our clients, and in the future growth of our Terminals Solutions, Payment-as-a-Service and Commerce Enablement businesses." Several Wall Street firms gave their opinions on Verifone Systems Inc. 1. Wedbush: Outperform with a 1 year price target of $44. "We believe VeriFone will sustain high-single-digit (constant currency) revenue growth and mid-teen earnings growth based on healthy global market growth, 2-3 year EMV/NFC cycle and 3-5 years of margin improvements." 2. Morgan Stanley: Equal-Weight with a 1 year price target of $36. "Fundamentally, PAY seems to be executing on plan, with its new product line being well received by the market and management continuing to execute on its restructuring program...management also highlighted significant improvement in the service business, which has a long sales cycle and should continue to show signs of strength in the coming quarters." 3. Jefferies: Buy with a 1 year price target of $43.00. "Once again, PAY delivered a very solid beat on both revs and non-GAAP EPS in F1Q. Despite a modest decrease in F15 guidance, impressive progress and execution in the core business drove an increased FY15 constant currency outlook. We believe shares will react positively as the Street already anticipated stiffer FX headwinds." 4. Deutsche Bank: Hold with a 1 year price target of $29.00. "Although the EMV upgrade cycle is driving strong growth in the US, it's unclear if the growth is sustainable post the liability shift in Oct 2015. Given the additional FX headwinds, weakness in Russia, partially offset by strength in the U.S., PAY lowered FY15 rev guidance by $35M and EPS $0.07... PAY believes the services business is improving and expects to benefit from expansion into new countries (from 15 to 17 countries; however, sales cycles remain elongated compared to system sales." 5. Barclays: Overweight with a price target of $47.00. "We believe that with the company focused on: redefining global product management processes; re engineering R&D and improving cost structures, we will see VeriFone making continued operational margin progress, which over the last several quarters has been evident with the company's continued EBIT margin expansion."