a disaster in the making. Last week, after VeriFone reported a brutal second-quarter earnings report, the analyst community was forced to the point where they had to say "enough is enough." I say "forced" because it seems as if their hands were tied. For one reason or another, investors have always wanted to like this stock despite overwhelming evidence suggesting they shouldn't. The fact that shares of VeriFone were up over 20% from the low serves as a perfect example. This came amid concerns about emerging mobile threats from the likes of Square and Intuit ( INTU), which has also begun to threaten VeriFone's value-added payment services. Making matters worse, there's Apple ( APPL), whose next iPhone is expected to be equipped with fingerprint scanning and an eWallet, which is broadly presumed as the nail in VeriFone's coffin.
Investors at one point insisted on giving VeriFone the benefit of the doubt, while blaming the soft macro climate as the main culprit. I would accept this excuse for one or two quarters. But how then do you explain that one of VeriFone's main rivals, Ingenico ( INGIY), is performing so well? Ingenico is coming off a strong quarter where revenue climbed 24%. These two are competing for the same market share. It's certainly unbeatable that Ingenico is gaining share at VeriFone's expense, especially in regions such as North America and Latin America where VeriFone saw its revenue decline by 5% and 14%, respectively. since I recommended it as a sell. Although the valuation looks interesting here, I would be careful about catching this falling knife. There are still stubborn investors in this stock wanting to be proven right. However, this is one of those situations where it is better to just cut your losses and move on. I'm not discounting that another company can step in and make a bid for VeriFone. But that's a pretty big bet. I don't believe the company can be an attractive asset, especially when it can't seem to save itself from the proliferation of mobile payment alternatives. Does VerfiFone have the ability to turn things around? I believe it does. But it still doesn't make the stock a buy today. The Street finally looks ready to hang up on the idea that the company can remain viable. I agree. But I also feel the conversation regarding VeriFone's value has gone over the limit. At the time of publication, the author had a position in Apple. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.