Why NCR Corp. (NCR) Stock Is Falling Today

NEW YORK (TheStreet) -- NCR Corp. (NCR) was falling 6.6% to $30.42 Wednesday after lowering its revenue guidance for 2014, and despite beating analysts' estimates for earnings in the first quarter.

For the first quarter NCR reported earnings of 50 cents a share, beating the Capital IQ Consensus Estimate of 49 cents a share by 1 cent. Revenue grew 7.8% from the year-ago quarter to $1.52 billion, while analysts expected revenue of $1.51 billion.

Looking forward to 2014 NCR now expects revenue of $6.75 billion to $6.85 billion, and earnings of $3.00 to $3.10 a share. The new guidance calls for revenue growth of 10% to 12% in the year, down from the previous guidance of 12% to 14%. Analysts expect revenue of $6.85 billion and earnings of $3.05 a share for the year.

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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. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, NCR's share price has jumped by 28.43%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NCR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 271.83% to $264.00 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 7.56%.
  • 35.39% is the gross profit margin for NCR CORP which we consider to be strong. Regardless of NCR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NCR's net profit margin of 11.85% is significantly lower than the industry average.
  • You can view the full analysis from the report here: NCR Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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