NCR
Group (NYSE: NCR)
Date:
07/15/2016
P/E
Ratio: N.A. Fair
Value: $20
Dividend
Yield: N.A. Beta:
1.83
NCR Corp is a technology
company providing products & services enabling businesses to connect,
interact & transact with customer. Its products include ATM & financial
services software, point of sale devices, self-service kiosks & software
applications.
▎Financial Report
Analysis
The financial services segment
accounts for most revenue. From the operating income by segment, we can see
that financial services and hospitality segment have higher operating margin. About
46% of revenue is from U.S. and 31% is from EMEA.
Revenue of NCR group grew
modestly. However, operating income decreased from 2014. From 10K of NCR Group,
it stated that “During 2015, the Company
transferred the UK London pension plan obligations to PIC through the
completion of a buy-out of the pension plan, resulting in a settlement of $427
million in 2015.” The pension expenses caused big influence on cost and
expense. In addition, NCR has not paid cash dividends historically and it state
that NCR group does not anticipate the payment of cash dividends on NCR common
stock in the immediate future.
From DuPont analysis, ROA and
ROE of 2015 are negative due to negative net margin. Asset Turnover didn’t
change much from 2006 to 2015. However, financial leverage is fluctuant along
with the time. TTM of financial leverage achieves almost 15 times. As a result,
NCR group may have financial risk in the future.
▎Valuation: Market Multiples
▎Valuation: Discount Free Cash Flow
▎Comments
To sum up, NCR
group’s financial position doesn’t seem positive in recent years. Management of
NCR indicates that they will develop toward to clouding. However, it didn’t not
show on revenue. I think investor should wait and see whether NCR can change situation
or not.
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