Financial technologies are extending their reach into more aspects of life, all over the world, opening more doors for companies like NCR (NYSE: NCR), ACI Worldwide (NASDAQ: ACIW) and Fiserv (NASDAQ: FISV).
Today’s fintech innovations go beyond just online payments and paying directly from your phone.
Point-of-sale systems are increasingly specialized. There are systems not just for restaurants, but specifically for pizzerias! Cinemas have their own point-of-sale systems.
Hardware, too, is part of the payment revolution. Hardware-as-a-service is also emerging as a way for small business owners to access online payments, without expensive technology buildouts.
Even the lowly ATM is being reimagined with card-free technology.
Here’s a look at three companies active in the point-of-sale and online payment industries.
NCR provides point-of-sale software for banks, retailers and restaurants. It also makes ATM systems. The company is acquiring Cardtronics, a non-bank ATM operator, in an all-cash deal of about $2.5 billion. The company subsequently issued $1.2 billion in debt to cover the transaction.
Earnings and revenue growth have slowed in the past three quarters, due to closures and reduced business for the restaurant and retail segments. However, NCR believes once business picks up again, businesses will want to upgrade their payment systems. NCR issued no full-year guidance, but analysts see earnings per share of $1.81, up 8% from 2020.
The stock struggled to clear resistance between $39 and $40 recently. It ended Tuesday’s session at $39.33, up $0.14 or 0.36%. Trading volume in the past two sessions was above average, so investors should watch for continued conviction if the stock moves higher.
A holding pattern like this is often constructive. It shows investors are holding shares, not paring back. This could set up the stock for a fresh rally.
ACI Worldwide sells digital payment systems to enable money transfers, bill payments, e-commerce and other types of transactions. It also has fraud and risk management products.
Revenue growth slowed in the third and fourth quarters of 2020, but in the company’s fourth-quarter conference call, CEO Odilon Almeida said, “We see significant opportunity in real time payments, e-commerce with large sophisticated global merchants, and fast growing emerging markets. Over the past several months and into 2021, we are increasing our sales and marketing investment by 25% and increasing the number of sales associates by 35%.”
The stock is currently forming a consolidation below its February 17 high of $43.23. Downside volume has been mostly muted, a good sign that there’s no wild stampede for the exits, just some mild selling.
Even with the recent downturn, the stock is still up 2.47% year-to-date. It closed Tuesday at $39.38, a gain of $0.09 or 0.23%. It ended the session 0.5% below its 50-day average. The next potential buy point would be above $41.13. Watch for it to clear that point in heavy trade.
Fiserv offers a wide range of fintech products and services, including bill payment, brick-and-mortar payment systems, ATM systems, banking platforms, and credit- and debit-card systems.
In March, the company said it would acquire Pineapple Payments, which provides payment processing technologies for software vendors and small businesses.
The stock cleared a consolidation in mid-March and rallied to a high of $126.25. It’s currently trading in a fairly tight range above both its 10-day and 50-day averages. Trading volume has been mild as the stock etched the sideways pattern, which is exactly what you want to see. That means institutional investors are buying enough shares to maintain the stock’s current level. That’s often an indication of confidence in its future prospects.
Analysts’ consensus rating on the stock is “buy,” with a price target of $129.72.
Revenue was down 5% in the most recent quarter, to $3.83 billion. Earnings rose 16% to $1.30 per share. Wall Street pegs earnings at $5.42 per share this year, which would mark a 23% increase over 2020.
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