Stifel maintains hold on NCR Atleos stock with $34 target

On Tuesday, Stifel analysts maintained a Hold rating on NCR (NYSE:VYX) Atleos Corp. (NYSE: NATL) with a steady price target of $34.00. The analysts observed that NCR Atleos’ performance metrics generally surpassed consensus expectations, although they fell slightly short of Stifel’s own projections. With a current market capitalization of $1.93 billion and EBITDA of $736 million, the company has demonstrated solid operational performance. The company’s earnings per share (EPS) guidance for 2025 suggests that EPS estimates are likely to increase, with InvestingPro data indicating expected net income growth this year.

NCR Atleos provided revenue guidance for 2025 that appears modest when compared to expectations. However, after accounting for a 2% foreign exchange headwind, Stifel’s revenue estimate sits toward the lower end, while the consensus estimate may reach just above the midpoint. Trading at $26.03, the stock appears undervalued according to InvestingPro Fair Value metrics, despite a challenging YTD return of -21.31%. The company also announced an adjustment to its Adjusted EBITDA calculation for 2025, which is expected to result in a $13 million increase for the 2024 figure. According to Stifel’s analysis, their own 2025 EBITDA estimate aligns with the midpoint of the guidance range, with the consensus estimate potentially reaching between the midpoint and the upper end.

The analysts expressed a need for further clarity on several aspects of NCR Atleos’ business. Key areas of interest include the trends in revenue and margins across different business lines, the progress of the ATM as a Service (ATMaaS) offering, and the continuation of the company’s capital-light trend. Additionally, Stifel analysts are seeking more details on the adjustments made to the EBITDA calculation and how these changes might affect a direct comparison of EBITDA guidance against current estimates.

Stifel’s commentary reflects a cautious stance on NCR Atleos’ stock, pending a clearer understanding of the company’s financial trajectory and operational strategies. The firm’s analysts are particularly focused on how these factors will influence the company’s performance and valuation in the near future.

In other recent news, NCR Atleos Corp reported its fourth-quarter 2024 financial results, revealing a notable earnings beat with an EPS of $1.11, surpassing the forecast of $0.80. However, the company faced a revenue shortfall, reporting $1.11 billion against an expected $1.16 billion. Despite strong earnings, the revenue miss raised concerns among investors. The company highlighted robust growth in its ATM as a Service segment, which increased by 27% year-over-year, ending the year with 28,000 units. For the full year, NCR Atleos achieved a 3% increase in revenue to $4.3 billion and a 7% rise in adjusted EBITDA to $781 million. The company provided 2025 guidance with projected EPS in the range of $3.90 to $4.10 and anticipated continued growth in its ATaaS business. Analyst firm D.A. Davidson inquired about the company’s ARPU and geographic demand trends, indicating ongoing interest in NCR Atleos’ service offerings. NCR Atleos plans to expand its ATM as a Service business to 40,000 units by the end of 2025, with an ARR exceeding $300 million.

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