Has VeriFone Systems Inc (PAY) Become the Perfect Stock?

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VeriFone Systems Inc (NYSE:PAY) is a big player in the push toward mobile payment systems that will allow consumers to make purchases using smartphones and other mobile devices rather than through credit cards. The industry has drawn in intense competition both among established players in the payment-systems business as well as with innovative companies seeking to make a mark on the business for the first time. eBay Inc (NASDAQ:EBAY)‘s PayPal has established itself as the leader in online-based mobile payments, while privately held Square is hitting at individual and small-business users. Meanwhile, Groupon Inc (NASDAQ:GRPN) and Intuit Inc (NASDAQ:INTU) are both using their established business clients as potential cross-selling opportunities for their own mobile payment offerings.

Recently, VeriFone Systems Inc (NYSE:PAY) hasn’t handled that competitive pressure particularly well. Last month, the company slashed its preliminary estimates for its fiscal first quarter as well as cutting guidance for the current quarter, sending the stock down nearly 40%. When it released its full first-quarter report earlier this month, the news was just as bad as expected, as the company said that it had failed to meet the needs of its local merchants.

The bad news led to CEO Doug Bergeron’s resignation last week, which led to a small bounce for the stock. Yet even with new leadership, it’s uncertain whether VeriFone can catch up after the ground it has lost with its customer base.

For VeriFone Systems Inc (NYSE:PAY) to improve, it needs to reorient itself to the new reality in payment systems. Otherwise, it risks getting left behind for good and having little chance of ever becoming a perfect stock.

The article Has VeriFone Become the Perfect Stock? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of eBay and Intuit.

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