Market Overview - Markets experienced significant fluctuations in April, primarily influenced by changing trade news, including new tariffs announced by President Trump, which led to a sharp stock reaction [1] - The S&P 500 has seen five consecutive days of gains but remains down over 1% for the month, with investors now focusing on a week filled with corporate earnings and key economic data such as GDP, inflation, and jobs reports [1] Value Investing - In volatile market conditions, value investing is particularly relevant as value stocks, often trading below their true worth, can provide stability [2] - Investing in solid, undervalued companies is suggested as a safer strategy, with specific stocks highlighted for their high earnings yield [3] Earnings Yield Metric - Earnings yield, calculated as annual earnings per share (EPS) divided by market price, is a useful metric for identifying attractively valued stocks [4] - A higher earnings yield indicates undervaluation compared to stocks with lower yields, which are seen as overpriced [4] Stock Screening Criteria - A primary screening criterion for stock selection is an earnings yield greater than 10%, supplemented by estimated EPS growth for the next 12 months being greater than or equal to the S&P 500 [7] - Additional criteria include an average daily volume of at least 100,000 and a current price of $5 or more [8][9] Stock Recommendations - **Equinox Gold Corp. (EQX)**: A Canadian mining company with a projected earnings growth of 355% and 30.4% for 2025 and 2026, respectively, and a Zacks Rank 1 [10][11] - **NCR Atleos Corp (NATL)**: Provides digital banking solutions with an estimated earnings growth of 24.5% and 22.4% for 2025 and 2026, respectively, also holding a Zacks Rank 1 [12][13] - **AerSale Corp (ASLE)**: Offers aviation products and services with projected earnings growth of 289% and 23% for 2025 and 2026, respectively, and a Zacks Rank 1 [14][15] - **Qifu Technology, Inc. (QFIN)**: An AI-driven Credit-Tech platform with expected earnings growth of 22.4% and 12.12% for 2025 and 2026, respectively, and a Zacks Rank 1 [16][17]

Core Viewpoint - NCR Atleos (NATL) has shown a 5.3% increase in stock price over the past four weeks, with a mean price target of $43.20 indicating a potential upside of 59.8% from the current price of $27.04 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $14.38, where the lowest estimate is $29 (7.3% increase) and the highest is $60 (121.9% increase) [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about NATL's earnings prospects, as indicated by a strong agreement in revising EPS estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, one estimate has increased, leading to a 7.8% rise in the Zacks Consensus Estimate for the current year [12] Zacks Rank and Investment Potential - NATL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13]

Core Viewpoint - NCR Atleos (NATL) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the changing earnings picture that impacts stock prices [1][2]. - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly influenced by institutional investors [4]. Company Performance and Outlook - The upgrade indicates an improvement in NCR Atleos' underlying business, with expectations of earnings reaching $4.01 per share for the fiscal year ending December 2025, representing a year-over-year increase of 24.5% [5][8]. - Over the past three months, the Zacks Consensus Estimate for NCR Atleos has increased by 7.8%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of NCR Atleos to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [10].

Financial Data and Key Metrics Changes - 2024 was described as an outstanding year for the company, with solid operational and financial results delivered across four consecutive quarters [6] - The company aims to exit the year with EBITDA margin rates around 20%, indicating a focus on maintaining profitability [24] Business Line Data and Key Metrics Changes - The average revenue per unit (ARPU) in the backlog was noted to have shifted from approximately $12,000-$13,000 to around $10,000, reflecting a change in the mix of units being implemented [9] - By the end of the fourth quarter, the company had 28,000 ATM as a Service units, up from 22,000 in the previous quarter, although short of the 30,000 target set for the year [15] Market Data and Key Metrics Changes - Demand for hardware and as a service offerings is increasing, particularly in India and Western Europe, with the U.S. also showing positive trends [11] - The company has a significant presence in India with over 120,000 machines, indicating a strong market scale [22] Company Strategy and Development Direction - The company is focusing on higher ARPU machines in North America and Europe while also recognizing the potential in the Indian market [21] - There is an ongoing strategy to move customers towards more comprehensive outsourcing services, with 90,000 machines currently described as managed services [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and its ability to deliver financial results that improve sequentially [6] - The recurring revenue performance is tracking close to expectations, although slightly behind initial models, with belief in future growth in service levels [46] Other Important Information - The company plans to exclude certain income and expenses from EBITDA calculations to reduce volatility, which could impact reported figures by $5 million to $10 million per quarter [32] - There is an expectation to find off-balance sheet financing solutions for ATM as a Service hardware in the near future [39] Q&A Session Summary Question: Can you talk about the ARPU in the as a service backlog? - The average ARPU in the backlog has shifted to around $10,000, with some high ARPU units being implemented in the fourth quarter [9] Question: Can you provide a geographic overview of demand trends? - Demand is strong in India, Western Europe, and the U.S. for both hardware and as a service offerings [11] Question: How many ATM as a Service units were there at the end of the quarter? - There were 28,000 units at the end of the fourth quarter, up from 22,000 in the previous quarter [15] Question: What is the outlook for gross profit margins in 2025? - The company expects variability in gross profit margins due to seasonality, with a target of around 20% EBITDA margin [24] Question: Can you comment on the change in EBITDA calculation? - The new EBITDA calculation will exclude certain income and expenses to reduce volatility, particularly from pension and FX impacts [32] Question: Is there a plan for a buyback program? - The company is considering a buyback plan, especially in light of current stock trading levels and investor preferences [44] Question: What is the outlook for free cash flow targets? - Free cash flow growth is not expected to be linear, with some recent tax breaks and accrued costs impacting the current quarter [51]

Fourth Quarter and Full Year 2024 Earnings Call Tim Oliver, President & Chief Executive Officer Andy Wamser, Chief Financial Officer Stuart Mackinnon, Chief Operating Officer 1 FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Act"). ...

Core Insights - NCR Atleos reported quarterly earnings of $1.11 per share, exceeding the Zacks Consensus Estimate of $1.06 per share, and showing a significant increase from $0.69 per share a year ago, resulting in an earnings surprise of 4.72% [1] - The company posted revenues of $1.11 billion for the quarter ended December 2024, slightly missing the Zacks Consensus Estimate by 0.18%, and compared to year-ago revenues of $1.1 billion [2] - NCR Atleos shares have underperformed the market, losing about 16.2% since the beginning of the year, while the S&P 500 has gained 1.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.57 on revenues of $1.04 billion, and for the current fiscal year, it is $3.68 on revenues of $4.37 billion [7] - The estimate revisions trend for NCR Atleos is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which NCR Atleos belongs, is currently in the top 34% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Another company in the same industry, DocuSign, is expected to report quarterly earnings of $0.84 per share, reflecting a year-over-year change of +10.5%, with revenues anticipated to be $759.96 million, up 6.7% from the previous year [9][10]

Company Overview - NCR Atleos Corporation completed its separation from NCR Corporation on October 16, 2023, launching as an independent publicly-traded company[14]. - The company operates approximately 78,000 self-service banking terminal locations, including the Allpoint network, which is the largest retail surcharge-free independent network of ATMs in the U.S.[19]. - The company serves banks and credit unions in over 140 countries, with a significant presence in retail channels through long-term contracts with major merchants[35]. Revenue Generation and Business Model - The company generates diversified and largely recurring revenues across contracted software, services, and predictable transactional revenue streams, with a focus on increasing transaction levels at existing locations[23]. - The ATM as a Service (ATMaaS) model is expected to double recurring revenue compared to traditional ATM hardware and maintenance contracts, expanding the total addressable market[27]. - As of December 31, 2024, the company has ATM networks in 12 countries and generated 55% of its revenue outside the United States in 2024[27]. - The company aims to execute its ATM as a Service strategy to enhance software and services revenue, as well as recurring revenue[93]. - The company derives a significant portion of its revenues from ATM transaction fees, which could decline due to reduced ATM usage or competitive pricing pressures[102]. Strategic Initiatives and Growth Plans - The company aims to invest in international expansion, particularly in high cash jurisdictions like Italy and other EU countries[27]. - NCR Atleos intends to pursue strategic acquisitions to complement and accelerate its organic growth strategies[27]. - The company plans to grow the Allpoint network to drive high-margin incremental transaction volumes as banks reduce physical footprints[27]. - Atleos aims to expand its customer base by increasing the use of indirect sales channels and targeting the small- to medium-business market[86]. Innovation and Technology - The company is transitioning to software-led solutions, with a cloud-based software platform that integrates with customer systems, enhancing recurring revenue opportunities[21]. - Atleos is investing in data analytics to better understand ATM usage patterns and identify growth opportunities[25]. - Research and development expenses were $66 million in 2024, $77 million in 2023, and $64 million in 2022, indicating a focus on innovation and maintaining competitive position[37]. Employee and Talent Management - As of December 31, 2024, Atleos had approximately 20,000 employees globally, with 40% in Europe, Middle East and Africa, 26% in Asia Pacific, 17% in the Americas (excluding the U.S.), and 17% in the U.S.[61]. - Atleos established a university hiring program, welcoming 200 intern and graduate hires in its inaugural year[65]. - The company has launched training and development resources via LinkedIn Learning and NCRA U, enhancing employee engagement and skill development[65]. - Atleos is focused on expanding internal talent development programs to enhance employee engagement and retention[65]. Risk Management and Compliance - The Chief Risk Officer oversees enterprise risk management programs, ensuring effective identification and response to material risks[50]. - Atleos closely monitors the evolving regulatory environment, which could lead to changes in its business operations, particularly in the virtual currency space[66]. - The company is subject to various government regulations, including those related to environmental protection and anti-corruption laws, which may impact its operations[64]. - Atleos must comply with Section 404 of the Sarbanes-Oxley Act by December 31, 2024, to ensure the reliability of its financial statements, or risk a decline in stock price[172]. Financial Position and Debt - Atleos has approximately $2,994 million of outstanding indebtedness and an additional $350 million available under a senior secured revolving credit facility[128]. - The underfunded status of the U.S. pension plan was $279 million as of December 31, 2024, while the non-U.S. pension plans had a funded position of $162 million[145]. - The company plans to use debt and other financing sources to maintain and grow its business, but future access to financing is uncertain[139]. Environmental and Social Responsibility - The company is committed to environmental management, utilizing remote sensing technology to reduce maintenance visits and carbon footprint[57]. - Atleos emphasizes supplier responsibility, requiring compliance with ethical standards and environmental regulations from its suppliers[59]. - Climate change poses long-term risks to business continuity, with potential impacts from extreme weather events affecting operations in vulnerable regions[119]. Cybersecurity and Data Protection - Atleos has established an Enterprise Risk Management (ERM) program to manage cybersecurity risks alongside other business risks[199]. - The company employs various cybersecurity measures, including firewalls and encryption, to protect against cyberattacks[200]. - Data protection and cybersecurity issues are significant risks, with potential breaches leading to reputational harm and financial losses[123]. Market and Competitive Landscape - Atleos faces intense competition in the technology industry from major players like Visa, Mastercard, and Fiserv, which may affect market share and profitability[88]. - The company is exposed to risks from domestic and global economic conditions, which could adversely affect its financial performance[82]. - Recent bank failures in 2023 and 2024 have created uncertainty in the banking industry, potentially affecting sales and business operations[98].

Financial Performance - Fourth quarter 2024 revenue was $1.1 billion, a 1% increase year-over-year, with core business revenue growing by 4%[4] - Full year 2024 revenue reached $4.3 billion, up 3% from the previous year, with recurring revenue of $3.1 billion growing by 5%[4] - Fourth quarter GAAP fully diluted earnings per share (EPS) was $0.61, a 126% increase, while Non-GAAP fully diluted EPS was $1.11, growing by 73%[4] - Adjusted EBITDA for the fourth quarter was $219 million, a 23% increase compared to the prior year, with a total adjusted EBITDA of $781 million for the full year, up 7%[5] - The company reported a fourth quarter net income of $46 million on a GAAP basis, a 128% increase compared to a net loss of $165 million in the prior year[5] - Full year 2025 guidance includes total revenue growth of 1% to 3% and Non-GAAP diluted EPS growth of 21% to 27%[12] - Total revenue for Q4 2024 was $1,108 million, a slight increase from $1,098 million in Q4 2023, while total revenue for the full year 2024 reached $4,317 million, up from $4,191 million in 2023[27] - Adjusted gross profit for Q4 2024 was $297 million, representing a gross margin of 26.8%, compared to 18.0% in Q4 2023; for the full year, adjusted gross profit was $1,033 million with a margin of 23.9%[27] - Income from operations for Q4 2024 was $151 million, significantly higher than $35 million in Q4 2023, with an operating margin of 13.6% compared to 3.2% in the prior year[27] - Net income attributable to Atleos for Q4 2024 was $46 million, a recovery from a loss of $165 million in Q4 2023; full year net income was $91 million compared to a loss of $134 million in 2023[27] - Basic earnings per share for Q4 2024 was $0.63, compared to a loss of $2.34 in Q4 2023; diluted earnings per share was $0.61 versus a loss of $2.34 in the same period[27] - Adjusted net income attributable to Atleos for the twelve months ended December 31, 2024, was $239 million, compared to $91 million in GAAP results[34] Revenue Segments - The Self-Service Banking segment generated $718 million in revenue for Q4 2024, an 8% increase year-over-year, and $2.7 billion for the full year, a 4% increase[7] - The Network segment reported Q4 revenue of $317 million, a 2% decrease year-over-year, but full year revenue increased by 1% to $1.3 billion[7] - Recurring revenue accounted for 71% of total revenue for both the three months ended December 31, 2024, and 2023, with recurring revenue increasing to $790 million from $777 million[32] Cost Management - The company reported a significant reduction in selling, general and administrative expenses, which decreased to $127 million in Q4 2024 from $140 million in Q4 2023[27] - Research and development expenses decreased to $19 million in Q4 2024 from $23 million in Q4 2023, indicating a focus on cost management[27] - The company incurred a loss on extinguishment of debt amounting to $20 million in Q4 2024, consistent with the previous year[27] - Interest expense for Q4 2024 was $72 million, slightly lower than $75 million in Q4 2023, reflecting improved debt management[27] Operational Efficiency - Atleos has approximately 20,000 employees globally, contributing to its operational efficiency and market expansion efforts[14] - The company aims to enhance its ATM solutions platform and improve customer service performance to support growth strategies[1] - The company plans to continue focusing on transformation and restructuring efforts, which contributed $2 million to gross profit in the latest quarter[33] Assets and Liabilities - Total assets decreased to $5,552 million as of December 31, 2024, from $5,715 million as of December 31, 2023[29] - Total liabilities decreased to $5,288 million as of December 31, 2024, from $5,466 million as of December 31, 2023[29] - Cash and cash equivalents increased to $419 million as of December 31, 2024, from $339 million as of December 31, 2023[29] - The company reported net cash provided by operating activities of $80 million for the three months ended December 31, 2024, compared to $8 million in the same period of 2023[31] Non-GAAP Measures - The company emphasized the importance of non-GAAP measures, such as Adjusted EBITDA, to provide a clearer picture of operational performance, which is crucial for investor understanding[20] - Adjusted EBITDA for Q4 2024 was $219 million, representing 19.8% of revenue, compared to $178 million or 16.2% in Q4 2023[38] - The adjusted free cash flow-unrestricted for FY 2024 was $242 million, an increase from $184 million in FY 2023[39] - Total capital expenditures for Q4 2024 were $31 million, down from $47 million in Q4 2023[39] - The company reported a loss on debt extinguishment of $20 million in FY 2024, impacting overall financial performance[38]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: NCR Atleos (NATL) - NCR Atleos currently holds a Momentum Style Score of B, indicating a favorable position in momentum investing [3]. - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [4][12]. Price Performance - Over the past week, NATL shares increased by 1.77%, while the Zacks Internet - Software industry rose by 1.89% [7]. - In a longer timeframe, NATL's shares have appreciated by 12% monthly, compared to the industry's 3.37% [7]. - Over the last quarter, NATL shares have risen by 19.67%, and over the past year, they have gained 55.43%, significantly outperforming the S&P 500's increases of 9.93% and 33.15%, respectively [8]. Trading Volume - The average 20-day trading volume for NATL is 478,682 shares, which serves as a bullish indicator when combined with rising stock prices [9]. Earnings Outlook - In the past two months, one earnings estimate for NATL has increased, while none have decreased, raising the consensus estimate from $3.10 to $3.18 [11]. - For the next fiscal year, one estimate has also moved upwards with no downward revisions, indicating positive earnings momentum [11].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Investing in bargain stocks with recent price momentum may be a safer approach [2] Group 2: NCR Atleos (NATL) Stock Analysis - NCR Atleos (NATL) has shown a four-week price change of 12%, indicating growing investor interest [3] - Over the past 12 weeks, NATL's stock gained 19.7%, demonstrating its ability to deliver positive returns over a longer timeframe [4] - NATL has a beta of 1.29, suggesting it moves 29% higher than the market in either direction [4] - NATL has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 1 (Strong Buy) due to upward trends in earnings estimate revisions, which attract more investors [6] - NATL is trading at a Price-to-Sales ratio of 0.57, suggesting it is undervalued at 57 cents for each dollar of sales [6] Group 3: Additional Investment Opportunities - Besides NATL, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen [7] - Zacks offers over 45 Premium Screens to help identify potential winning stocks based on various investing styles [8]