NCR Stock Gains in After-Hours Trading on $800 Million Blackstone Investment
NEW YORK (TheStreet) -- NCR (NCR) - Get Report stock is higher by 3.58% to $27.74 in after-hours trading on Wednesday, as asset manager Blackstone Group (BX) nears a deal to invest more than $800 million in the company, sources told the Wall Street Journal.
Blackstone will have a stake in NCR worth more than 15%, and in return will receive convertible preferred shares that pay a dividend and two seats on the company's board, the Journal reports. Blackstone is hoping for a rebound in the company's software business.
Additionally, NCR is expected to announce a $1 billion share buyback, according to the Journal.
Shares of the company closed up by 0.30% to $26.78 today, giving the company a market value of $4.54 billion.
Based in Duluth, GA, NCR is a global technology company that provides products and services that enable businesses to connect, interact and transact with their customers.
Separately, TheStreet Ratings team rates NCR CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate NCR CORP (NCR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its growth in net income. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 553.3% when compared to the same quarter one year prior, rising from $15.00 million to $98.00 million.
- NCR CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NCR CORP reported lower earnings of $1.06 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $1.06).
- NCR, with its decline in revenue, underperformed when compared the industry average of 25.6%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Currently the debt-to-equity ratio of 1.95 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, NCR maintains a poor quick ratio of 0.94, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, NCR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: NCR
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.