Wedbush Affirms Outperform On VeriFone Following Access Call With CFO


In a research report released yesterday, Wedbush analyst Gil Luria reiterated an Outperform rating on VeriFone Systems (NYSE:PAY) with a $40 price target, following Wedbush’s management access call with PAY’s CFO, Marc Rothman.

Luria wrote, “We believe VeriFone will continue to overcome its legacy issues, sustain high single digit revenue growth and a steep earnings growth trajectory as margins return to trend-line and beyond.” The analyst continued, “We believe that since Tier 1 retailers only represent 1.8 million of 8 million US installed base of terminals, we are far from saturation. It took three years to get to 30% penetration of the existing base (~2.4 million terminals) and we expect ~2/3 of all relevant locations (10 million which includes locations where card swipe is currently done on cash register) to be EMV compliant within 12-18 months (~6.7 million terminals). If it took three years to get to 2.4 million and over the next one year we may see as much as an additional 4.3 million EMV terminals, we also do not believe the upgrade cycle has peaked.”

Luria continued, “We believe Chinese market has the potential to fuel expanded growth if PAY can compete effectively with a new lower end product. We also believe PAY will continue to see success in Europe given competitive product set and recent wins.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gil Luria has a total average return of 10.1% and a 75.5% success rate. Luria has a 25.1% average return when recommending PAY, and is ranked #450 out of 3290 analysts.

 

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