Stifel sets $31 target on NCR Atleos with Hold rating By Investing.com

On Tuesday, NCR (NYSE:) Atleos Corp. (NYSE:NATL), a provider of ATM products and services, received a new coverage from a Stifel analyst with a Hold rating and a $31.00 price target. The firm’s analyst highlighted that NCR Atleos is engaged in the sale and service of ATMs, including software and full ATM outsourced management, known as ATM as a Service (ATMaaS).

The assessment of NCR Atleos’s market outlook suggests that the volume of ATMs is not expected to see significant growth. The company’s strategy is currently centered on monetizing the existing ATM fleets in the market. According to the analyst, NCR Atleos is anticipated to experience modest revenue growth, with potential for margin expansion as it increases its higher-margin service offerings.

The analyst’s commentary indicates a cautious optimism about the company’s growth trajectory. They noted that the revenue growth for NCR Atleos is expected to be modest but improving, and that the company should see expanding margins as it focuses on its more profitable services.

The Stifel report also mentioned that a more positive stance on NCR Atleos could be considered if there were greater confidence in the revenue estimates and in the development of the ATMaaS industry. The analyst emphasized the need for more conviction in the pace and extent of the industry’s evolution before adopting a more constructive view.

In summary, the Hold rating and $31 price target reflect a watchful approach to NCR Atleos’s stock, with the firm waiting for more evidence of the company’s growth potential and industry advancements before considering a rating change.

In other recent news, NCR Atleos Corporation has introduced a new feature allowing LibertyX customers to sell bitcoin and withdraw cash from ATMs across the United States. This development is part of the Atleos ReadyCode API suite, designed to simplify transactions from digital to physical currency. The company has also reported Q2 earnings surpassing estimates with an adjusted earnings per share (EPS) of $0.81, although revenue fell slightly short of the expected $1.1 billion.

Goldman Sachs has maintained a neutral rating on NCR Atleos, recognizing its strong Q2 performance. The company is also progressing with its ATM as a Service (ATMaaS) model, transitioning 1,300 units in Q2. This strategy, acknowledged by Goldman Sachs, has the potential to enhance revenue growth and customer retention.

Looking forward, NCR Atleos has forecasted an EPS of $0.71-$0.81 on revenue of $1.045-1.075 billion for Q3. The company has also revised its full-year 2024 guidance to an EPS of $2.90-$3.20 on revenue of $4.26-4.34 billion. These are among the recent developments for NCR Atleos as it continues to navigate its strategic transition and financial performance.

InvestingPro Insights

To complement the Stifel analyst’s perspective on NCR Atleos Corp. (NYSE:NATL), recent data from InvestingPro offers additional insights into the company’s financial position and market performance.

Despite the analyst’s cautious outlook, InvestingPro Tips suggest that NATL’s net income is expected to grow this year, and analysts predict the company will be profitable. This aligns with the Stifel report’s mention of potential margin expansion and improving revenue growth.

Interestingly, NATL has experienced a large price uptick over the last six months, with InvestingPro data showing a 46.31% price total return over this period. This significant increase could reflect growing investor confidence in the company’s strategy to monetize existing ATM fleets and expand its service offerings.

However, it’s worth noting that NATL is currently trading at a high Price / Book multiple of 8.14, which may indicate that the stock is relatively expensive compared to its book value. This valuation metric could be a factor in the analyst’s Hold rating and cautious stance.

For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics beyond those mentioned here. The platform currently lists 7 more tips for NATL, providing a deeper dive into the company’s financial health and market position.

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