Why VeriFone Systems Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of VeriFone Systems (NYSE: PAY  ) have plunged today by as much as 20% today after the company announced earnings with soft guidance.

So what: Non-GAAP revenue in the second quarter came in at $430 million, shy of the $440.3 million consensus estimate. The company posted non-GAAP net income per share of $0.42, similarly short of the $0.47 per share adjusted profit that investors were expecting. Interim CEO Richard McGinn said the company is "keenly aware" of the challenges it faces, but is investing heavily in a turnaround.

Now what: Guidance for the third quarter calls for adjusted revenue of about $400 million, with adjusted earnings per share in the ballpark of $0.20. That forecast is significantly below the $460.5 million in sales and $0.50 per share profit that the Street was modeling for. Jefferies is keeping a hold rating while lowering its price target to $16, while UBS is defending its buy rating and says the problems are fixable.

Interested in more info on VeriFone Systems? Add it to your watchlist by clicking here.

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9/30/2016 4:03 PM
PAY $15.74 Down -0.03 -0.19%
VeriFone Holdings CAPS Rating: ****