On Thursday, RBC Capital adjusted its price target for shares of NCR Voyix (NYSE: NYSE:VYX), lowering it to $19.00 from the previous $23.00. Despite this change, the firm maintained its Outperform rating on the stock. The adjustment comes after NCR Voyix reported quarterly results that aligned with expectations, despite the ongoing disruptions stemming from last year's corporate spin-off.
The company's latest financial performance indicated a significant year-over-year decline in low-margin Hardware revenue. However, this was an anticipated outcome, and the management has not altered its guidance. According to RBC Capital, the current financials reflect the situation as it was projected, with no surprises to the downside or upside.
The unchanged guidance from NCR Voyix's management suggests stability in the company's outlook. Although the decline in Hardware revenue was notable, it was in line with what had been forecasted for the period. The company's performance has remained consistent with the narrative set forth by its leadership.
RBC Capital's report highlighted that contract wins secured by NCR Voyix are expected to help moderate the decline in Hardware revenue in the second half of 2024. These new contracts appear to be a key factor in the company's strategy to balance out the lower revenues from its hardware segment.
As the market processes this information, the revised price target of $19.00 reflects RBC Capital's assessment of NCR Voyix's valuation in light of its recent performance and near-term prospects. The Outperform rating suggests that, despite the price target reduction, the firm views the stock as likely to perform better than the overall market.
InvestingPro Insights
As investors consider RBC Capital's revised price target for NCR Voyix, it's worth noting key metrics and insights from InvestingPro. The company holds a market capitalization of $1.76 billion and a high Price / Book ratio of 70.34, which can be indicative of the market's high expectations for future growth or a sign that the stock is overvalued relative to its assets. Despite a modest revenue growth of 0.98% in the last twelve months as of Q4 2023, NCR Voyix has not been profitable during this period, with a negative P/E ratio of -3.93.
InvestingPro Tips suggest that investors should be aware of the company's volatility, as stock price movements have been quite erratic. Analysts have revised their earnings downwards for the upcoming period, but they also predict that the company will be profitable this year. Furthermore, NCR Voyix does not pay a dividend, which may influence the investment decisions for income-focused shareholders.
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