NCR Q3 Earnings: Can NYSE:NCR Hit Its $0.39 EPS Target?

in EARNINGS/INVESTING IDEAS by

NCR Corporation (NYSE:NCR) is scheduled to report Q3 earnings results after markets close for trading on October 27, 2020.

The company is expected to report earnings of $0.39/share on revenue of $1.552 billion. The consensus earnings per share (EPS) of $0.39/share is based on a poll of 9 analysts and represents a decline in eps of −45.9% over the same quarter last year, when the company reported earnings of $0.73/share.

The revenue forecast of $1.552 billion based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −13.0%. Last year the company reported $1.783 billion in revenue for the quarter.

Expected to report EPS contraction of −45.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,551.73 $1,783.00 −13.0%
EPS $0.39 $0.73 −45.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarter, and missed expectations 1 quarter.

What are your expectations from NCR Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.23 $0.27 16.8% Beat
Q1, 2020 $0.32 $0.31 −2.8% Missed
Q4, 2019 $0.84 $0.85 1.5% Beat
Q3, 2019 $0.68 $0.73 7.7% Beat
Q2, 2019 $0.67 $0.76 14.2% Beat
Q1, 2019 $0.48 $0.48 0% Met
Q4, 2018 $0.82 $0.84 2.1% Beat
Q3, 2018 $0.54 $0.58 8.0% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $17.57 $19.05 8.4% Increase
April 30, 2020 $21.91 $18.02 −17.8% Decline
February 11, 2020 $34.24 $33.27 −2.8% Decline
November 7, 2019 $29.84 $31.46 5.4% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

NCR Corporation is currently trading at $21.77/share, down −0.5% for the day. The company is trading at approximately 60.7% of its 52-week high of $35.87/share. The company’s stock price is up 14.3% since the last earnings report and down −0.5% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 49.54 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:NCR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 5.85 and a forward P/E multiple of 11.78.

NCR Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.50. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21.77
P/E Ratio 5.8x
P/E Ratio (Fwd) 11.8x
PEG Ratio 0.0
Total Debt / Total Capital 61.6%
Levered Free Cash Flow $759 million
EV / EBITDA 9.8x

Finbox

NCR Corporation is a mid-cap stock with a market capitalization of $2.795 billion and a total enterprise value of $6.671 billion. The company operates in the Information Technology sector and the Technology Hardware, Storage & Peripherals industry.

NCR Corporation provides software and services worldwide. The company operates through Banking, Retail, Hospitality, and Other segments. The Banking segment offers solutions for financial services industry, including digital banking, branch transformation, and digital connected services; software solutions and platforms, such as a multi-vendor ATM management systems software application suites; payment processing software; fraud and loss prevention applications; and cash management and video banking software, as well as related hardware products comprise ATMs, interactive teller machines, cash dispensers, and image processing and check hardware. The Retail segment provides solutions for retail industry comprising comprehensive API-point of sale (POS) retail software platforms and applications, hardware terminals, self-service kiosks, which consists self-checkout (SCO), and payment processing solutions, as well as bar-code scanners. The Hospitality segment offers solutions for hospitality industry, including payment processing solutions for quick-service and table-service restaurants, convenience and fuel retailers, and other businesses; back-office inventory and store, and restaurant management applications, such as cloud-based loss prevention video technology and services. This segment also provides hospitality-oriented hardware products, which include POS terminals, SCO, and order and payment kiosks, bar code scanners, and printers and peripherals. The other segment offers maintenance, managed, and professional services using solutions comprises remote management and monitoring services for telecommunications and technology industry. NCR Corporation has partnership with Powertranz to enable integrated POS payments across Caribbean. NCR Corporation was founded in 1881 and is headquartered in Atlanta, Georgia.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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