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NCR Acquires D3 Technology to Penetrate New Market Segments

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NCR Corporation NCR recently acquired the online and mobile banking company, D3 Technology, to expand NCR Digital Banking into new market segments.

By joining forces with D3, the company is likely to build a strong digital transformation platform for large financial institutions. Further, NCR expects to capitalize on new market opportunities and bring top-tier capabilities to clients with this buyout.

Notably, by providing software APIs and tools, D3 aids banks and credit unions to offer digital banking services across various platforms including mobile.

Currently, NCR provides online and mobile banking solutions in the community bank and credit union market. The acquisition will broaden its bounds, allowing it to tap large banks in the United States and also international banks going forward.

Moreover, Mobile Payments quoted NCR management stating that the integration will lead to “account openings, improved money movement and enhanced analytics."

Although the company did not update its guidance, the acquisition is anticipated to be slightly dilutive to NCR’s EPS in the first year. On the last earnings call, management guided non-GAAP earnings per share between $2.75 and $2.85 in fiscal 2019 as compared to $2.62 in the prior year.

Eye on Digital Banking to Elevate Growth

Higher investment in NCR's Digital Banking solutions is proving beneficial to the company. Notably, NCR has received a positive feedback from customers on the new features and functionality. The company has also begun witnessing improved growth. In the first quarter of 2019, NCR signed seven new digital banking customers.

Last month, NCR entered into a partnership with digital receipt and data provider, Sensibill, to develop a solution for bank customers to store, organize and manage their receipts.

We note that NCR has supplemented its business growth through a strong inorganic growth story. In the past two decades, NCR has acquired more than 20 companies, which in turn, enabled it to enhance its capabilities across different areas. The latest acquisition will accelerate NCR’s Digital First Banking strategy, which is further likely to boost growth further.

NCR Corporation Revenue (TTM)

NCR Corporation Revenue (TTM)

NCR Corporation revenue-ttm | NCR Corporation Quote

Zacks Rank & Stocks to Consider

NCR currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the broader technology sector are Alteryx AYX, Rosetta Stone RST and j2 Global JCOM, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Alteryx, Rosetta Stone and j2 Global is currently projected at 13.7%, 12.5% and 8%, respectively.

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