- Shares of VeriFone Systems, Inc. (NYSE: PAY) have declined almost 20 percent in the past three months, from its high of $38.93 in June.
- Michael J. Grondahl of Piper Jaffray upgraded the rating on VeriFone Systems from Neutral to Overweight, while maintaining the price target at $38.50.
- Grondahl believes that the current share price offers an attractive entry point, especially given the long-term opportunities that lie ahead for the company.
Among the opportunities that the company has are the 3.2 million greenfield units that will be 100 percent EMV capable, as well as the move to cashless transactions, which Grondahl expects to drive merchant conversion in both the SMB and enterprise hospitality sectors.
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In addition, VeriFone Systems’ margin expansion story start with the company beginning to benefit from “its higher margin next gen terminals and streamlined operations.” The company is also expected to benefit with the Gilbarco partnership ramping in 2016, as VeriFone Systems “PAY begins penetrate the 600K EMV opportunity in US gas stations.”
Grondahl expects the company to report in-line earnings for FY2Q15, with the management continuing to make progress and the Fx headwinds seen last year moderating in the recent past.