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Questioning the valuation of a growth stock is a good way to fill up your inbox with hostile emails, but VeriFone (PAY) is offering up a case study in why valuation always matters. While the company is still growing, and still has an attractive global market opportunity, multiple missteps have led to a one-two punch of lower estimates and substantially lower multiples on those estimates. Although these shares may finally be resetting to a point where the valuation makes it appealing, management is going to have a long road back to reestablishing credibility with the Street.

Three Strikes, And The Stock Is Out

While VeriFone's announcement on Wednesday night was a warning and not a full earnings release,...

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