NCR (NYSE:NCR), an acronym for National Cash Register, continues to transform itself into a software-driven business. While hardware remains important (e.g., ATMs), software is the key to NCR's value proposition.
Evidence of the shift from hardware to software can be seen in one key metric: gross margin. In just the last 5 years, consolidated gross margin expanded from 22% and are expected to be in the 31% range in FY2014. To that end, solid low double-digit revenue growth led by software, coupled with margin expansion is key to the investment thesis. Stated differently, there is significant earnings leverage in the NCR economic model.
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Value Continues To Be Obscured By Transformation
While Q1 revenue was...
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