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On Tuesday, DA Davidson analyst Matt Summerville maintained a Buy rating and a $60.00 price target on NCR (NYSE:VYX) Atleos Corp. (NYSE: NATL), expressing confidence in the company’s performance and future prospects. According to InvestingPro data, analysts’ price targets range from $29 to $53, with the stock currently trading at $25.10, suggesting significant upside potential. The company appears undervalued based on InvestingPro’s Fair Value analysis. Summerville’s analysis pointed to solid performance in the Self-Service Banking (SSB) segment, which includes a healthy uptake in ATM as a Service (ATMaaS), service-led market share gains, and an ongoing hardware refresh cycle.
Despite some challenges, such as relative weakness in Europe and ongoing softness in the LibertyX operations, the overall execution by NCR Atleos has been sound, with key performance indicators (KPIs) in both the SSB and Network segments showing encouraging signs. The company’s financial performance supports this view, with revenue reaching $4.3 billion in the last twelve months and an EBITDA of $832 million. Summerville highlighted strong growth in annual recurring revenue (ARR) and average revenue per user (ARPU) as positive indicators for the company.Want deeper insights? InvestingPro subscribers have access to 10+ additional ProTips and comprehensive financial analysis for NCR Atleos, including detailed profitability metrics and growth forecasts.
The analyst also noted that NCR Atleos is committed to using its free cash flow (FCF) for debt reduction, with a target to reach 3.0x net leverage by mid-2025. This focus on lowering debt levels is expected to provide NCR Atleos with significant long-term capital deployment optionality.
Summerville’s reiteration of the $60.00 price target reflects his continued optimism about NCR Atleos’s strategic initiatives and financial management. The company’s dedication to service excellence and growth in recurring revenue streams, combined with prudent financial strategies, are key factors supporting the analyst’s positive outlook for the stock. This optimism is further supported by InvestingPro data showing the company trades at an attractive P/E ratio relative to its near-term earnings growth potential.
In other recent news, NCR Atleos Corp reported its fourth-quarter 2024 financial results, showcasing an earnings per share (EPS) of $1.11, which significantly exceeded the forecasted $0.80. However, the company fell short on revenue, reporting $1.11 billion against an expected $1.16 billion. Despite the revenue miss, NCR Atleos demonstrated robust growth in its ATM as a Service business, which increased by 27% year-over-year. Looking ahead to 2025, the company projects core sales growth of 3% to 6% and adjusted EBITDA growth of 6% to 9%, with a one percentage point impact from foreign exchange headwinds. DA Davidson maintains a Buy rating on NCR Atleos with a $60 price target, citing confidence in the company’s financial performance and growth prospects. Meanwhile, Stifel analysts have maintained a Hold rating with a $34 price target, noting that while NCR Atleos’ performance exceeded consensus expectations, it fell slightly short of their own projections. The analysts also expressed a need for further clarity on certain aspects of the company’s business, including revenue trends and the ATM as a Service offering. NCR Atleos has successfully reduced its balance sheet leverage, potentially paving the way for a stock buyback program.
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