A month has gone by since the last earnings report for NCR . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NCR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NCR Q4 Earnings and Revenues Beat Estimates
NCR Corporation reported strong fourth-quarter 2021 results. The enterprise technology provider reported non-GAAP earnings of 76 cents, surpassing the Zacks Consensus Estimate of 71 cents per share.
The bottom line improved 28.8% from 59 cents per share reported in the year-ago quarter, primarily driven by higher revenues and improved margins.
For the fourth quarter of 2021, the company reported revenues of $2.03 billion, outpacing the consensus mark of $2.01 billion. The top line witnessed a year-over-year surge of 15%, driven by contributions from the Cardtronics business, and solid growth across the company’s banking and hospitality segments.
NCR progressed significantly with its strategic growth initiatives, which are transforming it into a software platform and payments company. The company’s recurring revenues improved 35% to $1.18 billion in the quarter under review.
Quarterly Details
Banking revenues increased 40% year over year to $1.12 billion, primarily on higher software and services revenues (including the contributions of Cardtronics) and ATM hardware sales. Software and services revenues increased 27% to $1.47 billion during the quarter under review.
Retail revenues rose 9% to $620 million, primarily on higher self-checkout revenues and point-of-sale revenues across its food-drug-merchandise and convenience-fuel-retail customers.
Hospitality revenues surged 27% to $231 million, mainly driven by an increase in point-of-sale revenues across the company’s enterprise and small-and-medium business customers.
During the fourth quarter, NCR’s T&T revenues declined 20% to $68 million.
NCR’s Digital Banking Solution continued witnessing solid momentum, with revenues increasing 13.7% year over year to $133 million. Digital banking registered users rose 3.3% year over year to 25.3 million.
Operating Details
Non-GAAP gross margin of $549 million was up 18.1% year over year. Non-GAAP gross margin rate contracted 150 basis points (bps) to 27%, primarily due to elevated component and freight costs, partially offset by price hikes.
Non-GAAP operating expenses increased 7% year on year to $334 million, mainly due to the company’s planned increase in research and development costs related to higher strategic investments and inclusion of Cardtronics expenses.
Adjusted EBITDA surged 36.8% year over year to $353 million. The adjusted EBITDA margin expanded 160 bps to 17.4%.
Non-GAAP operating income increased to $215 million from the year-ago quarter’s $152 million. Non-GAAP operating margin contracted 280 bps to 16.4% from the year-earlier quarter’s 19.2%.
Balance Sheet & Other Details
NCR exited the December-end quarter with cash and cash equivalents of $447 million compared with $383 million reported during the September-end quarter.
Free cash inflow totaled $100 million compared with the prior quarter’s $125 million. Net cash provided by operating activities was $270 million in the fourth quarter.
During the full-year 2021, the company generated operating and free cash flows of $1.08 billion and $460 million, respectively.
Full-Year Highlights
NCR reported revenues of $7.16 billion in 2021, up 15% year over year. Recurring revenues grew 25% to $4.17 billion.
Non-GAAP diluted earnings were $2.56 per share, indicating a surge of 51.5% year over year.
For the full-year 2021, adjusted EBITDA increased 38.8% year over year to $1.24 billion. Adjusted EBITDA margin expanded 300 bps to 17.4%.
Guidance 2022
For the first quarter of 2022, NCR projects revenues between $1.9 billion and $1.95 billion. It forecast non-GAAP diluted earnings between 60 cents per share and 65 cents per share, increasing in the range of 18-27%.
Adjusted EBITDA is expected to be $325-$350 million, up 26-36% from the year-ago reported figure.
For the full-year 2022, NCR anticipates revenues between $8 billion and $8.2 billion, suggesting a year-over-year increase of 12-15%.
The company expects adjusted EBITDA in the band of $1.5-$1.575 billion, indicating a 21-27% year-over-year growth.
Non-GAAP diluted earnings are estimated to grow between 27% and 39%, in the range of $3.25-$3.55 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 5.83% due to these changes.
VGM Scores
At this time, NCR has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, NCR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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NCR (NCR) Down 13.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for NCR . Shares have lost about 13.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NCR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
NCR Q4 Earnings and Revenues Beat Estimates
NCR Corporation reported strong fourth-quarter 2021 results. The enterprise technology provider reported non-GAAP earnings of 76 cents, surpassing the Zacks Consensus Estimate of 71 cents per share.
The bottom line improved 28.8% from 59 cents per share reported in the year-ago quarter, primarily driven by higher revenues and improved margins.
For the fourth quarter of 2021, the company reported revenues of $2.03 billion, outpacing the consensus mark of $2.01 billion. The top line witnessed a year-over-year surge of 15%, driven by contributions from the Cardtronics business, and solid growth across the company’s banking and hospitality segments.
NCR progressed significantly with its strategic growth initiatives, which are transforming it into a software platform and payments company. The company’s recurring revenues improved 35% to $1.18 billion in the quarter under review.
Quarterly Details
Banking revenues increased 40% year over year to $1.12 billion, primarily on higher software and services revenues (including the contributions of Cardtronics) and ATM hardware sales. Software and services revenues increased 27% to $1.47 billion during the quarter under review.
Retail revenues rose 9% to $620 million, primarily on higher self-checkout revenues and point-of-sale revenues across its food-drug-merchandise and convenience-fuel-retail customers.
Hospitality revenues surged 27% to $231 million, mainly driven by an increase in point-of-sale revenues across the company’s enterprise and small-and-medium business customers.
During the fourth quarter, NCR’s T&T revenues declined 20% to $68 million.
NCR’s Digital Banking Solution continued witnessing solid momentum, with revenues increasing 13.7% year over year to $133 million. Digital banking registered users rose 3.3% year over year to 25.3 million.
Operating Details
Non-GAAP gross margin of $549 million was up 18.1% year over year. Non-GAAP gross margin rate contracted 150 basis points (bps) to 27%, primarily due to elevated component and freight costs, partially offset by price hikes.
Non-GAAP operating expenses increased 7% year on year to $334 million, mainly due to the company’s planned increase in research and development costs related to higher strategic investments and inclusion of Cardtronics expenses.
Adjusted EBITDA surged 36.8% year over year to $353 million. The adjusted EBITDA margin expanded 160 bps to 17.4%.
Non-GAAP operating income increased to $215 million from the year-ago quarter’s $152 million. Non-GAAP operating margin contracted 280 bps to 16.4% from the year-earlier quarter’s 19.2%.
Balance Sheet & Other Details
NCR exited the December-end quarter with cash and cash equivalents of $447 million compared with $383 million reported during the September-end quarter.
Free cash inflow totaled $100 million compared with the prior quarter’s $125 million. Net cash provided by operating activities was $270 million in the fourth quarter.
During the full-year 2021, the company generated operating and free cash flows of $1.08 billion and $460 million, respectively.
Full-Year Highlights
NCR reported revenues of $7.16 billion in 2021, up 15% year over year. Recurring revenues grew 25% to $4.17 billion.
Non-GAAP diluted earnings were $2.56 per share, indicating a surge of 51.5% year over year.
For the full-year 2021, adjusted EBITDA increased 38.8% year over year to $1.24 billion. Adjusted EBITDA margin expanded 300 bps to 17.4%.
Guidance 2022
For the first quarter of 2022, NCR projects revenues between $1.9 billion and $1.95 billion. It forecast non-GAAP diluted earnings between 60 cents per share and 65 cents per share, increasing in the range of 18-27%.
Adjusted EBITDA is expected to be $325-$350 million, up 26-36% from the year-ago reported figure.
For the full-year 2022, NCR anticipates revenues between $8 billion and $8.2 billion, suggesting a year-over-year increase of 12-15%.
The company expects adjusted EBITDA in the band of $1.5-$1.575 billion, indicating a 21-27% year-over-year growth.
Non-GAAP diluted earnings are estimated to grow between 27% and 39%, in the range of $3.25-$3.55 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 5.83% due to these changes.
VGM Scores
At this time, NCR has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, NCR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.