Vontier - Faster EMV Erosion Is A Near-Term Challenge, And The Street Needs To See A Better Path For Growth

I've written in the past that oddly undervalued stocks make me nervous, and Vontier (NYSE:VNT) is at least partly a case in point. Writing about the stock a year ago, I wondered why the shares seemed so cheap, and the shares have fallen another 20% since then despite posting better-than-expected financial results.

While management's guidance for a quicker decline in EMV-related revenue certainly drove recent weakness, the reality is that Vontier shares have been weak since September of 2021 (the time of the company's first significant M&A transaction) despite generally good results and a decent outlook. While I can understand some degree of frustration over capital deployment and concerns about near-term growth leverage, expectations are so low now that low single-digit growth can drive a double-digit forward return.

 

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Vontier - Faster EMV Erosion Is A Near-Term Challenge, And The Street Needs To See A Better Path For Growth