Investopedia: Wall Street Clearly Underestimating VeriFone's Struggles

Going into this quarter, Wall Street wanted to buy into the idea of a VeriFone (NYSE:PAY) turnaround. Not only were the shares up more than 20% from their low, but the earnings estimate revisions had been pretty mild despite strong share gains at rival Ingenico (Nasdaq:INGIY). Last and not least, instead of being worried about further gains from next-gen payment rivals like eBay (Nasdaq:EBAY), Intuit (Nasdaq:INTU), and Square, many sell-side analysts were speculating as to who was going to buy VeriFone to accelerate their market growth.

Fiscal second quarter results are going to throw a bucket of ice water on a lot of that optimism. Not only are the share losses to Ingenico (and other providers) becoming more apparent, but customer dissatisfaction and industry pricing pressures are looming larger. I won't rule out the possibility that the right CEO hire and the development of a stronger value-added service portfolio could lead to an eventual turnaround at VeriFone, but it's very clearly going to take some time for that to happen.

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