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On Tuesday, DA Davidson analyst Matt Summerville maintained a Buy rating on NCR Voyix (NYSE:VYX) with a steady price target of $17.00. With the stock currently trading at $10.07 and near its 52-week low of $10.37, Summerville updated his analysis, noting a revision of the company’s 2025 and 2026 estimates due to a more conservative core growth expectation, particularly in hardware. This adjustment also leads to a forecast of lower EBITDA margins as a result of reduced volumes.
Despite the downward adjustment in growth and margin estimates, Summerville highlighted the strength of NCR Voyix’s balance sheet, which he believes can support further stock buybacks. According to InvestingPro data, management has been aggressively buying back shares, even as the company maintains a current ratio of 1.18. The analyst pointed out that while hardware demand is currently soft in both the Retail and Restaurant sectors, the company’s Annual Recurring Revenue (ARR) continues to grow at a mid-single-digit rate. This growth is bolstered by a high customer retention rate of 98%, alongside new client acquisitions and positive key performance indicators (KPIs).
Summerville’s commentary emphasizes that the valuation of NCR Voyix shares remains attractive, which justifies the Buy rating and the $17 price target. The analyst’s outlook reflects his confidence in the company’s financial health and its ability to navigate through current market challenges.
NCR Voyix’s commitment to shareholder returns through buybacks, coupled with its consistent ARR growth and strong customer retention, provides a basis for the analyst’s favorable view on the stock. Despite the revised estimates, DA Davidson sees the current stock valuation as an opportunity for investors.
In other recent news, NCR Atleos Corporation reported fourth quarter earnings that exceeded analyst expectations, with adjusted earnings per share reaching $1.11, surpassing the projected $0.80. However, the company’s revenue for the quarter was slightly below estimates, coming in at $1.11 billion compared to the anticipated $1.16 billion. For the full year 2024, NCR Atleos reported revenue of $4.3 billion, marking a 3% increase year-over-year, with recurring revenue growing by 5% to $3.1 billion. Looking ahead to 2025, the company anticipates core revenue growth between 3-6% in constant currency, alongside adjusted EBITDA growth of 7-10% and non-GAAP diluted EPS growth of 21-27%. The company generated $80 million in operating cash flow during Q4 and $344 million for the entire year of 2024, with adjusted free cash flow reported at $119 million for the quarter and $242 million for the year. NCR Atleos noted favorable market fundamentals, highlighting the continued demand from banks and retailers for outsourced solutions to manage cash ecosystems and reduce costs.
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