Can VeriFone Systems Inc. (PAY) Walk the Talk?

The positives

But, as usual, there is a generous scoop of positives that we usually associate with VeriFone Systems Inc. (NYSE:PAY). The company is making investments in order to enhance its software services portfolio, and is also addressing the customization conundrum that it had to face in the previous quarter. One undeniable advantage for VeriFone is its relationship with leading players in mobile payments.

Last year, the company had struck a deal with eBay Inc (NASDAQ:EBAY)’s PayPal. Through this deal, PayPal gained access to over a million NFC-enabled points of sale. PayPal users would be able to make in-store payments where VeriFone terminals are installed.

Partnerships such as this, and with other illustrious names, are a good sign for VeriFone in the long run. But, the company needs to focus on its hardware business with renewed vigor in order to make the most of its partnerships.

Now what

Even after the massive hits, VeriFone Systems Inc. (NYSE:PAY) shares trade at a trailing P/E multiple of 28. Earlier, I would have easily suggested buying shares despite the expensive valuation, since VeriFone was exhibiting terrific revenue growth. But after what happened last quarter, the same cannot be said anymore.

Although the company is finally looking to take corrective measures, there’s still a long way to go. Investors might accumulate some shares, but the company’s prospects would light up only after it addresses the challenges it is facing, and brings its revenue growth back to the glory days of old.

The article Can VeriFone Systems Walk the Talk? originally appeared on and is written by Harsh Chauhan.

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