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Will NCR be Able to Maintain its Earnings Streak in Q2?
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NCR Corporation is scheduled to report second-quarter 2018 results on Jul 25.
Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive surprise of 11.06%.
In the last reported quarter, the company came up with a positive earnings surprise of 27.27%. Let's see how things are shaping up for this announcement.
Factors Likely to Drive Results
NCR’s efforts to boost the cloud services of its Software segment and modernize its Services segment are tailwinds. The company’s shift in focus from underperforming parts of its business, such as its ATM segment, toward these growth segments is likely to benefit the stock. NCR is witnessing growing demand for its point of sale (POS) devices among retailers and hospitality industries as it facilitates automation of bill payment and accounting.
Moreover, NCR’s exposure in the self-service kiosk space is extending to markets such as financial services, retail, hospitality, travel and gaming. The company, with a wide range of self-service kiosk solutions is anticipated to continue gaining in this domain as well.
According to research and consulting firm RBR, NCR continues to remain the leader in the global self-checkout market. Moreover, per the “Global EPOS and Self-Checkout 2018 study”, NCR recorded faster growth than the market in EPOS shipments, for the fourth consecutive year. However, lull in its ATM business is an overhang on revenue growth. The primary reasons for this decline are delay in spending by large customers across North America, India, the Middle East and Africa.
Moreover, the company’s highly leveraged balance sheet, with long-term debt of $3.04 billion while cash and cash equivalents amounting to only $348 million at the end of first-quarter 2018 is also an area of concern for the company.
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
NCR has a Zacks Rank #3 and an Earnings ESP of +0.32%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
NetApp, Inc. (NTAP - Free Report) with an Earnings ESP of +1.12% and a Zacks Rank #1.
CyberArk Software Ltd. (CYBR - Free Report) with an Earnings ESP of +3.38% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will NCR be Able to Maintain its Earnings Streak in Q2?
NCR Corporation is scheduled to report second-quarter 2018 results on Jul 25.
Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive surprise of 11.06%.
In the last reported quarter, the company came up with a positive earnings surprise of 27.27%. Let's see how things are shaping up for this announcement.
Factors Likely to Drive Results
NCR’s efforts to boost the cloud services of its Software segment and modernize its Services segment are tailwinds. The company’s shift in focus from underperforming parts of its business, such as its ATM segment, toward these growth segments is likely to benefit the stock. NCR is witnessing growing demand for its point of sale (POS) devices among retailers and hospitality industries as it facilitates automation of bill payment and accounting.
Moreover, NCR’s exposure in the self-service kiosk space is extending to markets such as financial services, retail, hospitality, travel and gaming. The company, with a wide range of self-service kiosk solutions is anticipated to continue gaining in this domain as well.
According to research and consulting firm RBR, NCR continues to remain the leader in the global self-checkout market. Moreover, per the “Global EPOS and Self-Checkout 2018 study”, NCR recorded faster growth than the market in EPOS shipments, for the fourth consecutive year. However, lull in its ATM business is an overhang on revenue growth. The primary reasons for this decline are delay in spending by large customers across North America, India, the Middle East and Africa.
Moreover, the company’s highly leveraged balance sheet, with long-term debt of $3.04 billion while cash and cash equivalents amounting to only $348 million at the end of first-quarter 2018 is also an area of concern for the company.
What the Zacks Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
NCR has a Zacks Rank #3 and an Earnings ESP of +0.32%, which indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NCR Corporation Price and EPS Surprise
NCR Corporation Price and EPS Surprise | NCR Corporation Quote
Other Stocks to Consider
Here are some other stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Castlight Health, Inc. (CSLT - Free Report) with an Earnings ESP of +11.11%, and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
NetApp, Inc. (NTAP - Free Report) with an Earnings ESP of +1.12% and a Zacks Rank #1.
CyberArk Software Ltd. (CYBR - Free Report) with an Earnings ESP of +3.38% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>