NCR Stock Isn’t the Fintech Buy Analysts Seem to Think It Is

Stocks to sell

NCR (NYSE:NCR) is one of the oldest companies on the New York Stock Exchange, but its longevity doesn’t necessarily mean that NCR stock is a good investment. As the former cash register company looks to transition to fintech, the question may be whether it’s doing too little too late.

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When cash registers and adding machines were high tech and the company was called National Cash Register, the stock was a screaming buy. For context, NCR was declared a monopolist under the Sherman Antitrust Act of 1912.

IBM (NYSE:IBM) founder Thomas J. Watson learned his trade at NCR. NCR was one of the BUNCH (Burroughs, Univac (NYSE:UIS), NCR, Control Data, and Honeywell (NYSE:HON)), which sought to compete with IBM in the 1950s.

That NCR is no more. That NCR was based in Dayton, Ohio. It left Dayton five years ago and is now based in Atlanta, near Georgia Tech. The new NCR wants to be seen as a financial technology company, a fintech.

Is this supposedly new and improved NCR worth buying?

A Closer Look at NCR Stock

Soon after moving to Atlanta, NCR bought Jet Pay, a small payments processor. It then bought D3 Technology, which does online and mobile banking for big banks. NCR calls this its “Digital First” strategy.

The company is innovating as fast as it can. It developed a “cardless” cash machine for India, which works with phone apps like PayTm. It bought Freshop, which helps grocers do e-commerce, and Terafina, whose software opens digital bank accounts.

This year NCR announced plans to buy Cardtronics (NASDAQ:CATM) whose 285,000 ATMs go into stores and aren’t owned by banks.

Cardtronics is the biggest deal to date, a $2.5 billion buy NCR will partly fund with new debt. Analysts are excited by the possibilities. Still, NCR had about $3.3 billion in long term debt at the end of last year, against just $338 million in cash.

But the result last year was a miss on earnings. Revenues were down 10% from 2019, and the company sustained a small loss. Since the start of 2021 NCR stock is up just 10%.

NCR Seeks to Dominate the Front End

NCR specializes in the front end of transaction processing. It’s still the leader in point of sale, with almost one-third of the U.S. market and one-fifth of Europe’s.

The company is big in restaurants, banking and retail. It’s trying to help those industries evolve, but they’re all being supplanted.

Banks are being replaced by fintechs like SoFi (NASDAQ:IPOE). Restaurants are being replaced by take-out ghost kitchens. Retailers are being replaced by giants like (NASDAQ:AMZN) and Walmart (NYSE:WMT).

Despite the problems of 2020, analysts believe NCR’s acquisitions make it a great stock to buy for 2021. All five following it at Tipranks rate it a “buy.”

Analysts see it earning $2.54/ share this year and $3.27/share next year. That means you’re paying just 11.3 times 2022 earnings if you buy now. They see its Return on Capital Employed (ROCE) rising, and the reopening of the economy playing into its hands.

The Bottom Line

The acquisition binge and analyst support has driven NCR stock up 115% in the last 12 months, but the company now must perform.

The reopening of the economy means stores and restaurants, its biggest customers, will be coming back. Maybe NCR will, too.

If it doesn’t, there are lots of bigger fintech buyers in Atlanta ready to snap it up with its market cap of $5.3 billion. NCR is many things but it’s no longer a big fish.

At the time of publication, Dana Blankenhorn directly owned shares in AMZN.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at, tweet him at @danablankenhorn, or subscribe to his Substack

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