The decision to end its sale comes after a $9 billion sale to private equity firm Thoma Bravo fell through, according to the New York Post. Thoma Bravo was seen as NCR's best chance for a buyout after Carlyle Group and Blackstone (BX) - Get Report pulled away from the company.
NCR and Thoma Bravo could not agree on a price for the buyout, according to the Post. The private equity firm reportedly didn't offer much more than NCR's current trading price, which closed at $30.38 a share on Wednesday.
The report comes days after NCR reported missed results for the second quarter. On Tuesday, NCR reported earnings of 66 cents a share for the second quarter, above analysts' estimates of 59 cents a share. Revenue fell 3.6% year over year to $1.6 billion for the quarter, compared to analysts' estimates of $1.62 billion.
TheStreet Ratings team rates NCR CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate NCR CORP (NCR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its generally strong cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 400.00% to $75.00 million when compared to the same quarter last year. In addition, NCR CORP has also vastly surpassed the industry average cash flow growth rate of 50.58%.
- NCR CORP's earnings per share declined by 25.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over 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 ($2.65 versus $1.06).
- The revenue fell significantly faster than the industry average of 35.9%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Currently the debt-to-equity ratio of 1.91 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 0.93, 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. In comparison to the other companies in the Computers & Peripherals industry and the overall market, NCR CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: NCR Ratings Report