VeriFone Is Priced For Perfection Despite Significant Short-Term And Longer-Term Risks
- Despite a recent rebound in revenue trends, current elevated expectations, expanded valuation and potential disintermediation risk skew the risk/reward to the downside.
- Fundamental improvement is largely priced in at these levels given the 130% forward P/E multiple expansion over the last year.
- Current valuation is near ten-year highs and does not seem to appropriately discount the substantial longer-term uncertainty around the company’s core business.
- Company (and Street's) use of certain non-GAAP earnings measures meaningfully distort VeriFone's true economic profitability.