VeriFone Winning Back Confidence (PAY)

For guidance, it raised the estimates to $0.29 to $0.30 EPS on revenues of $245 to $250 million versus Thomson Reuters estimates of $0.28 EPS and $236 million in revenues.  For all of 2010 the company is targeting $1.12 to $1.15 EPS on revenues of $960 to $970 million.  That compares to a prior target of $1.00 to $1.10 EPS on revenue of $925 to $940 million.

The turnaround here now appears to be continued, and the question is if the company can get back its old solid position before it imploded in late-2007.  If the company merely meets the lower-end of its guidance today for 2010 of $960 million to $970 million, then it is back on the path for growth as revenues were $844.7 million for its fiscal (OCT) 2009 and $921.9 million for its fiscal 2008.

It may also be time for at least some upgrades from analysts if the valuations can be easily justified.  Most analysts have not issued buy or similar ratings on the stock in some time, in part because its forward earnings estimates are roughly at the market for multiples.  The mean analyst consensus is for a price target of nearly $23.00.  Before this one imploded in late-2007 it was almost a $50.00 stock.

Perhaps the biggest issue here remains that it still carries what many would read as being in the red with a net negative tangible book value.  But it is also still flush with cash as of today.

Shares closed up 2.9% at $17.31 in regular trading and the stock is up over 2% more at $17.69 in the after-hours trading.   The 52-week range is $6.22 to $23.75.

JON C. OGG