Goldman Sachs Starts NCR Atleos Corp. (NATL) at Neutral, 'Promising migration to an ATMaaS model'

Goldman Sachs analyst George Tong initiates coverage on NCR Atleos Corp. (NYSE: NATL) with a Neutral rating and a price target of $23.00.

The analyst comments "We are initiating coverage of NCR Atleos (NATL) with a Neutral rating and $23, 12-month price target. NATL is a leading provider of ATM hardware, services and software, with its vertical integration representing a key competitive advantage enabling cross-sell/upsell and share gains. We believe the company's migration to an ATM-as-a-service model, whereby hardware, software, maintenance and back-end services are combined into a single subscription contract, will drive an expansion of its global addressable ATM solutions market from $10bn, of which NATL currently has 40% share, to $25bn as it captures more of banks' in-house spend with a broader range of services offered. While we look for this transformation to drive an acceleration of revenue growth from low-single-digits in 2024 to mid-single digits by 2025, accompanied by EBITDA margin expansion from high-teens to mid-20s by 2027, we identify near-term hardware revenue headwinds associated with this migration and identify execution risk as ATMaaS revenue comprises only 4% of total revenue today. We believe NATL's current valuation fairly captures this execution risk, as well as the company's lower growth and margins, higher financial leverage and lower FCF conversion relative to peers."

For an analyst ratings summary and ratings history on NCR Atleos Corp. click here. For more ratings news on NCR Atleos Corp. click here.

Shares of NCR Atleos Corp. closed at $19.98 yesterday.

You May Also Be Interested In

• B.Riley Starts Weave Communications Inc (WEAV) at Buy
• Barclays Starts Centrus Energy Corp. (LEU) at Equalweight
• Clean Energy Fuels (CLNE) PT Lowered to $2.50 at Raymond James