VeriFone Systems Inc. Stock Upgraded (PAY)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

NEW YORK ( TheStreet) -- VeriFone Systems (NYSE: PAY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, compelling growth in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • PAY's very impressive revenue growth greatly exceeded the industry average of 6.9%. Since the same quarter one year prior, revenues leaped by 55.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 43.1% when compared to the same quarter one year prior, rising from $26.35 million to $37.70 million.
  • Net operating cash flow has significantly increased by 56.07% to $82.44 million when compared to the same quarter last year. In addition, VERIFONE SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of 0.20%.
  • 47.80% is the gross profit margin for VERIFONE SYSTEMS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.60% trails the industry average.

Verifone Systems, Inc. designs, markets, and services electronic payment solutions in North America and internationally. The company has a P/E ratio of 15.1, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. VeriFone Systems has a market cap of $3.74 billion and is part of the consumer goods sector and consumer durables industry. Shares are down 2.3% year to date as of the close of trading on Thursday.

You can view the full VeriFone Systems Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

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