On Wednesday, Goldman Sachs maintained a Neutral rating on NCR (NYSE:VYX) Atleos Corp. (NYSE: NATL) with a steady price target of $29.00. The investment firm recognized NCR Atleos for its strong second-quarter performance, highlighting that the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) margins and earnings per share (EPS) exceeded both Goldman Sachs' projections and the wider market consensus. Additionally, NCR Atleos' revenue matched closely with market expectations, and the company confirmed its guidance for the full year.
NCR Atleos is advancing its ATM as a Service (ATMaaS) strategy and has successfully transitioned 1,300 units to this new model in the second quarter, with about half of these being lighter ATMaaS deployments that involve only software and services. These lighter deployments are less capital intensive, which could be beneficial for the company's financials.
The Self-Service Banking segment of NCR Atleos effectively marketed software and services in traditional setups, while the Network segment saw gains from increased withdrawal volumes and the introduction of new service offerings.
Goldman Sachs noted that the ATMaaS strategy has the potential to broaden NCR Atleos' market reach, enhance revenue growth and customer retention, and improve profit margins over time.
However, the firm also acknowledged that the transition to the ATMaaS model is still in the preliminary phase. Despite ATMaaS revenue growing approximately 30% year-over-year, it currently represents only 4% of the company's total revenue. NCR Atleos has set a target to expand its ATMaaS unit deployments to 30,000 by the end of 2024, with expectations of a significant increase in deployments closer to the year's end.
In other recent news, NCR Atleos Corporation reported mixed results for the second quarter, with earnings surpassing analyst expectations, but revenue falling slightly short. The company posted adjusted earnings per share of $0.81, exceeding the analyst consensus of $0.52. However, revenue for the quarter was $1.08 billion, just below the projected $1.1 billion.
NCR Atleos' Q2 revenue saw a 4% year-on-year increase to $1.08 billion, with recurring revenue rising 9% to $793 million. The adjusted EBITDA was reported at $193 million.
Looking ahead, the company has forecasted an EPS of $0.71-$0.81 on revenue of $1.045-1.075 billion for the third quarter, compared to analyst estimates of $0.90 EPS and $1.083 billion in revenue. In light of these recent developments, NCR Atleos has also revised its full-year 2024 guidance, now expecting an EPS of $2.90-$3.20 on revenue of $4.26-4.34 billion. The company has also reaffirmed its full-year adjusted EBITDA target of $770-800 million and raised the low end of its adjusted free cash flow guidance to $190-220 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.