JP Morgan Positive on VeriFone's Strong Revenues

JP Morgan has published a research report on VeriFone

after the company reported strong headline revenues. In the report, JP Morgan writes, "PAY's strong headline revenue/non-GAAP EPS results of $416mm/$0.53 were strong, coming in ahead of JPMe and Street at $399mm/$0.50 and $406mm/$0.51, respectively, although (1) softer-than-expected HYC revenues, (2) updated company commentary suggesting Point revenues could be more back-end loaded than previously expected, and (3) the magnitude of add-backs and adjustments to non-GAAP earnings could give investors pause. Management's tone on underlying business trends was generally positive, and the company offered FY12 revenue/non-GAAP EPS guidance of $1.9bn-$1.92bn/$2.53-$2.60, implying ~46% and ~34% revenue and non-GAAP EPS growth, respectively. Excluding recent acquisitions, we estimate FY12 revenue guidance implies only high-singledigit organic growth, which could disappoint some investors. That said, PAY has a history of underguiding and outperforming." JP Morgan has suspended its rating and price target on VeriFone, which is currently trading down $2.72 from yesterday's $40.55 closing price.