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NCR to Improve Self-Service Banking Channel for Santander Bank

NCR Corporation NCR recently announced that Santander, UK has selected its ATM-as-a-Service solution to modernize the bank’s self-service banking channel. The new service agreement expands NCR’s long-standing partnership with Santander, UK, which is part of the multinational financial services company, Banco Santander, S.A.

As part of the newly entered deal, NCR’s ATM-as-a-Service solution will transform, connect and run Santander bank’s self-service network of more than 1,700 ATMs across the United Kingdom. The transition will help the bank shift the operational management of its self-service channel, including ATM monitoring, hardware maintenance, software, cash management, transaction processing and help desk, to NCR.

NCR’s ATM-as-a-Service solution will improve Santander’s customer experience and reduce the burden of bank staff to interact with customers on other banking services.

NCR Corporation Price and Consensus

NCR Corporation Price and Consensus
NCR Corporation Price and Consensus

NCR Corporation price-consensus-chart | NCR Corporation Quote

We remain highly positive about NCR's ATM footprint. The company has been one of the world's largest and leading suppliers of multi-vendor ATM hardware and applications for more than 30 consecutive years. We believe that NCR's commitment to protecting the trust and integrity of the ATM channel has been inspiring banks and other financial institutions to choose its services.

In the third quarter of 2022, NCR’s Digital Banking Solution revenues increased 7% year over year to $137 million. Revenues from the Self-Service Banking segment marginally improved to $640 million from $637 million in the year-ago quarter.

Of late, NCR has been focusing more on providing ATM as a service rather than offering hardware. For this, in September 2022, NCR revealed that it is planning to spin off into two new publicly traded standalone companies. One of these will focus on the digital commerce business spearheading the retail, hospitality and digital banking industries. The other will provide solutions related to global ATM as a Service and ATM network businesses.

The separation intends to attract distinct shareholder bases, which are better aligned with each company’s value proposition and financial profile. Both companies will follow different business goals, capital structures and allocation strategies. These will help NCR deliver long-term growth with increased flexibility in separate sets of operations and sustainably create value for stockholders, offering them greater transparency.

Despite supply-chain disruptions and other macroeconomic headwinds, NCR managed to deliver outstanding third-quarter 2022 results, with strong revenue growth and increased profitability. The enterprise technology provider reported revenues of $1.97 billion, witnessing a year-over-year increase of 4%. The upside was driven by strong execution and growth across the company’s business segments except Other. NCR’s third-quarter non-GAAP earnings rose 16% year over year to 80 cents per share.

However, NCR's near-term prospect looks gloomy as organizations are pushing back their investments in big and expensive technology products due to global economic slowdown concerns. The resurgence of COVID-19 cases in China and the ongoing Russia-Ukraine war are likely to continue disrupting its overall financial performance in the near term.

Moreover, higher-than-expected inflationary pressure has led to a substantial increase in components, freight and fuel expenses, which are anticipated to continue hurting the company’s profitability in the next few quarters. Foreign exchange headwinds remain an added woe.

Zacks Rank & Stocks to Consider

NCR currently carries a Zacks Rank #4 (Sell). Shares of NCR have decreased 45% year to date (YTD).

Some better-ranked stocks worth considering from the broader technology sector are Celestica CLS, Zscaler ZS and Coupa Software COUP. Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Coupa each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 9.4% up to $1.86 per share in the past 30 days.

CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have decreased 0.4% YTD.

The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 5 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved a penny north to $1.18 per share in the past 60 days.

ZS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 57.7% YTD.

The Zacks Consensus Estimate for Coupa's fourth-quarter fiscal 2023 earnings has been revised 3 cents northward to 7 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved upward by 19 cents to 44 cents per share in the past 90 days.

Coupa's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 478.1%. Shares of COUP have slumped 71.1% YTD.

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