VeriFone Systems (PAY) Stock Jumps on Partnership With Vantiv (VNTV)

NEW YORK (TheStreet) -- Shares of VeriFone Systems Inc. (PAY)  are up 2.37% to $35.23 in midday trading after the company announced a partnership with payment processing service provider Vantiv Inc  (VNTV) to target retailers looking to upgrade their point of sale systems to handle Apple 's (AAPL) Apple Pay and other new electronic forms of payment.

TheStreet's Jim Cramer said on CNBC that he thinks that the retailers will have to upgrade their payment terminals because in October 2015 there are going to be some changes in liability when it comes to security breaches.

Cramer added that retailers will look to VeriFone, because the company is the leader in this market.

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Shares of Vantiv are up 0.65% to $32.29 today.

Separately, TheStreet Ratings team rates VERIFONE SYSTEMS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate VERIFONE SYSTEMS INC (PAY) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

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

  • The revenue growth came in higher than the industry average of 10.9%. Since the same quarter one year prior, revenues rose by 14.1%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.
  • 45.21% 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 -6.09% is in-line with the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the IT Services industry. The net income has significantly decreased by 1446.8% when compared to the same quarter one year ago, falling from -$1.88 million to -$29.03 million.
  • 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. Compared to other companies in the IT Services industry and the overall market, VERIFONE SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: PAY Ratings Report

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