NYSE:NCR

Stock Analysis Report

Executive Summary

NCR Corporation provides software and services for the financial, retail, hospitality, telecommunications, and technology industries worldwide.

Rewards

Trading at 31.5% below its fair value

Earnings are forecast to grow 42.09% per year

Became profitable this year

Risk Analysis

Debt is not well covered by operating cash flow

Large one-off items impacting financial results



Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Visa

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Share Price & News

How has NCR's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NCR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

NCR

1.6%

US Tech

1.7%

US Market


1 Year Return

35.0%

NCR

93.4%

US Tech

23.2%

US Market

Return vs Industry: NCR underperformed the US Tech industry which returned 96.6% over the past year.

Return vs Market: NCR exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

NCRIndustryMarket
7 Day3.6%1.6%1.7%
30 Day4.0%12.1%4.2%
90 Day19.3%31.6%11.9%
1 Year35.0%35.0%96.6%93.4%25.8%23.2%
3 Year-15.2%-15.2%155.4%136.9%52.8%42.9%
5 Year34.9%34.9%174.0%146.0%75.2%55.8%

Price Volatility Vs. Market

How volatile is NCR's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NCR undervalued compared to its fair value and its price relative to the market?

30.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NCR ($34.47) is trading below our estimate of fair value ($50.32)

Significantly Below Fair Value: NCR is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NCR is poor value based on its PE Ratio (51.6x) compared to the Tech industry average (26.1x).

PE vs Market: NCR is poor value based on its PE Ratio (51.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: NCR is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: NCR is overvalued based on its PB Ratio (6x) compared to the US Tech industry average (1.9x).


Next Steps

Future Growth

How is NCR forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

42.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NCR's forecast earnings growth (42.1% per year) is above the savings rate (1.7%).

Earnings vs Market: NCR's earnings (42.1% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NCR's revenue (2.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: NCR's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NCR's Return on Equity is forecast to be high in 3 years time (34.2%)


Next Steps

Past Performance

How has NCR performed over the past 5 years?

-5.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NCR has a large one-off loss of $178.0M impacting its September 30 2019 financial results.

Growing Profit Margin: NCR became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: NCR's earnings have declined by -5.8% per year over the past 5 years.

Accelerating Growth: NCR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: NCR has become profitable in the last year, making it difficult to compare its past year earnings growth to the Tech industry (25.2%).


Return on Equity

High ROE: NCR's Return on Equity (17.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NCR's financial position?


Financial Position Analysis

Short Term Liabilities: NCR's short term assets ($3.2B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: NCR's short term assets ($3.2B) do not cover its long term liabilities ($5.0B).


Debt to Equity History and Analysis

Debt Level: NCR's debt to equity ratio (321%) is considered high.

Reducing Debt: NCR's debt to equity ratio has increased from 193% to 321% over the past 5 years.

Debt Coverage: NCR's debt is not well covered by operating cash flow (16.4%).

Interest Coverage: NCR's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet

Inventory Level: NCR has a low level of unsold assets or inventory.

Debt Coverage by Assets: NCR's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is NCR's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.6%industryaverage1.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate NCR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NCR's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NCR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NCR's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NCR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of NCR's salary, the management and board of directors tenure and is there insider trading?

1.5yrs

Average management tenure


CEO

Mike Hayford (59yo)

1.8yrs

Tenure

US$14,239,889

Compensation

Mr. Michael Dale Hayford, also known as Mike, C.P.A., is the President, Chief Executive Officer and Director of NCR Corporation since April 30, 2018. He was Founder and Senior Advisor at Motive Capital Man ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD14.24M) is above average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Insufficient data to compare Mike's compensation with company performance.


Management Age and Tenure

1.5yrs

Average Tenure

59yo

Average Age

Experienced Management: NCR's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

4.0yrs

Average Tenure

66.5yo

Average Age

Experienced Board: NCR's board of directors are considered experienced (4 years average tenure).


Insider Trading

Insider Buying: NCR insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$274,24321 Nov 19
Adrian Button
EntityIndividual
Shares8,238
Max PriceUS$33.29
SellUS$299,006,38723 Sep 19
The Blackstone Group Inc.
EntityCompany
Shares9,129,966
Max PriceUS$32.75

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Frank Martire (71yo)

    Executive Chairman

    • Tenure: 1.7yrs
    • Compensation: US$7.18m
  • Owen Sullivan (61yo)

    Chief Operating Officer

    • Tenure: 1.5yrs
    • Compensation: US$6.85m
  • Mike Hayford (59yo)

    President

    • Tenure: 1.8yrs
    • Compensation: US$14.24m
  • Andre Fernandez (51yo)

    CFO & Executive VP

    • Tenure: 1.4yrs
    • Compensation: US$4.51m
  • Mike Nelson

    Vice President of Investor Relations

    • Bill VanCuren

      Senior VP & Chief Information Officer

      • Tenure: 3.7yrs
    • Dan Campbell (58yo)

      Executive Vice President of Global Sales

      • Tenure: 1.9yrs
      • Compensation: US$6.51m
    • Tim Vanderham

      Senior VP & CTO

      • Tenure: 1.5yrs
    • Jim Bedore (59yo)

      EVP, General Counsel & Corporate Secretary

      • Tenure: 1.2yrs
    • Beth Potter

      Chief Accounting Officer & Corporate Controller

      • Tenure: 0.2yrs

    Board Members

    • Chinh Chu (52yo)

      Independent Lead Director

      • Tenure: 3.9yrs
      • Compensation: US$364.08k
    • Linda Fayne Levinson (77yo)

      Independent Director

      • Tenure: 23yrs
      • Compensation: US$380.05k
    • Frank Martire (71yo)

      Executive Chairman

      • Tenure: 1.7yrs
      • Compensation: US$7.18m
    • Bob DeRodes (68yo)

      Independent Director

      • Tenure: 11.8yrs
      • Compensation: US$320.02k
    • Rick Clemmer (68yo)

      Independent Director

      • Tenure: 11.8yrs
      • Compensation: US$330.57k
    • Debby Farrington (69yo)

      Director

      • Tenure: 2.2yrs
      • Compensation: US$320.02k
    • Mike Hayford (59yo)

      President

      • Tenure: 1.8yrs
      • Compensation: US$14.24m
    • Matt Thompson (60yo)

      Independent Director

      • Tenure: 2.3yrs
      • Compensation: US$316.27k
    • Kurt Kuehn (65yo)

      Independent Director

      • Tenure: 7.7yrs
      • Compensation: US$339.02k
    • Greg Blank (38yo)

      Independent Director

      • Tenure: 4.1yrs

    Company Information

    NCR Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: NCR Corporation
    • Ticker: NCR
    • Exchange: NYSE
    • Founded: 1884
    • Industry: Technology Hardware, Storage and Peripherals
    • Sector: Tech
    • Market Cap: US$4.563b
    • Shares outstanding: 127.60m
    • Website: https://www.ncr.com

    Number of Employees


    Location

    • NCR Corporation
    • 864 Spring Street Northwest
    • Atlanta
    • Georgia
    • 30308
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    NCRNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1996
    NCR1DB (Deutsche Boerse AG)YesCommon StockDEEURDec 1996
    0K45LSE (London Stock Exchange)YesCommon StockGBUSDDec 1996

    Biography

    NCR Corporation provides software and services for the financial, retail, hospitality, telecommunications, and technology industries worldwide. The company’s Software segment offers industry-based software platforms, applications, and application suites for the financial services, retail, hospitality, and small business industries; and cash management software, video banking software, fraud and loss prevention, check and document imaging, remote-deposit capture, and customer-facing mobile and digital banking applications for the financial services industry. This segment also provides electronic and mobile payment solutions, sector-specific point of sale (POS) software applications, and back-office inventory, and store and restaurant management applications for the retail and hospitality industries; and software support and maintenance, and consulting and implementation services for its software solutions. Its Services segment offers assessment and preparation, staging, installation, implementation, and maintenance and support; and systems management and managed services for its hardware solutions, as well as installation, maintenance, and services for third party networking products and computer hardware. The company’s Hardware segment offers multi-function and thin-client ATMs, interactive teller machines, cash dispensers, cash recycling ATMs, and hardware for check and image processing; financial services hardware; and POS terminals, self-checkout kiosks, order and payment kiosks, bar code scanners, printers, and peripherals to retailers, restaurants, food service companies, and entertainment and sports venues. This segment also provides self-check in/out kiosk solutions for airlines, hotels, and casinos; and wayfinding solutions, digital signage, bill payment kiosks, and gift registries, as well as resells third party networking products. NCR Corporation was founded in 1884 and is headquartered in Atlanta, Georgia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/17 01:36
    End of Day Share Price2020/01/16 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.