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 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.
It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.
The article Why VeriFone Systems Shares Plunged originally appeared on Fool.com.Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.