NEW YORK ( TheStreet) -- It's really interesting to see how the Street has finally caught on to the nightmare that VeriFone ( PAY) has become.
Research firm Zack's just downgraded the company to "strong sell." While I don't disagree with this sentiment, it comes exactly nine months after I warned investors that VeriFone was 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.
Last but certainly not least, there's still that small bit of detail regarding the CEO -- the company doesn't have one. The post has been vacant for three months. No one seems to want the job. With the stock making new 52-week lows in what seems as every other session, investors want to know if is it time to jump in. I don't believe it is. Given the results of its recent quarter, this situation may possibly get worse before it gets better. Given the many challenges the company was dealing with, expectations were already low. But not only did VeriFone miss revenue and earnings-per-share estimates, but management issued guidance that killed any silver linings that were in sight. It doesn't appear as if growth will be seen during this fiscal year. The company reported second-quarter revenue of $426.3 million, which was down 9.7% year over year and down roughly 1% sequentially. The company saw a 19% decline in its systems solutions revenue, which offset a decent performance in the company's service revenue, which was up 14%.