New payment technology platforms such as Apple (AAPL) Pay, along with the security breaches that have plagued retailers like Target (TGT) and Home Depot (HD) , combine to make VeriFone a "huge opportunity hidden in plain sight," Mohr reasoned.
That's because VeriFone operates 5 million of the 8 million payment terminals in the U.S. -- plus 4 million payment terminals internationally. Many of these terminals will need to be upgraded due to the new payment platforms and security breaches.
Currently, only 30% of U.S. terminals are compatible with the new security-chip enabled EMV cards. (EMV stands for Europay, MasterCard (MA) and Visa (V) .) The chip provides an extra layer of protection against would-be thieves by requiring a pin number.
This type of credit card is being phased in during 2015 in the U.S. As many as 70% of U.S. terminals could be EMV chip-compatible in just the next few years, Mohr pointed out.
"Verifone is the biggest beneficiary of the shift, making it a stealth technology play for 2015 and beyond," Mohr added. VeriFone now has a market cap of $3.85 billion.
As retailers rush to protect themselves against future security breaches and to take advantage of new technologies, VeriFone Systems looks well-positioned, said Mohr.
-- Written by Bret Kenwell
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."
You can view the full analysis from the report here: PAY Ratings Report