VeriFone Systems (PAY) Lags In After-Hours Trading

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.

Trade-Ideas LLC identified VeriFone Systems ( PAY) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified VeriFone Systems as such a stock due to the following factors:

  • PAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.4 million.
  • PAY is down 3.2% today from today's close.

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More details on PAY:

VeriFone Systems, Inc. designs, markets, and services electronic payment solutions at the point of sale (POS) worldwide. Currently there are 7 analysts that rate VeriFone Systems a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for VeriFone Systems has been 1.5 million shares per day over the past 30 days. VeriFone Systems has a market cap of $3.9 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 2.12 and a short float of 4.2% with 2.41 days to cover. Shares are up 28.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates VeriFone Systems as a hold. 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 ratings report include:
  • The revenue growth came in higher than the industry average of 6.3%. 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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