Pacific Crest's Josh Beck downgraded VeriFone Systems Inc (NYSE: PAY) to Sector Weight with a price target between $22 and $24. The rating change came after VeriFone reported earnings and guidance short of analyst estimates.
Petro remained strong, surprising revenue estimates, but margins and international sales disappointed. "Media weakness and the EMV bottleneck pressured services revenue and margins while a mix shift between multi-lane/ SMB and petro weighed on product gross margin," according to Beck.
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Additionally, the analyst believed new restructuring plans will "mitigate revenue and gross-margin pressures," but overall gross-margins will decline in 2016 with a slight rebound in 2017.
At time of writing, VeriFone traded at $21.26, down 24.69 percent on the day.