Should Investors Pay Any Price For VeriFone?

There is no question that electronic payment specialist VeriFone (NYSE:PAY) was hit hard both by the recession and an accounting problem, but there is equally no question that the stock has rebounded sharply since its lows in early 2009. With electronic payments and credit card usage growing throughout the world, is there still enough runway for this company to validate what looks like a very high valuation? 

A Solid End To The Fiscal Year
VeriFone has done relatively well in terms of beating estimates over the past year or so, and the company ended this fiscal year on the same note. Revenue rose 27%, with 40% growth in the U.S. and 18% internationally.

Profitability also improved this quarter. Gross margin (on a non-GAAP basis) rose about two points to 40%, and earnings were better on an operating and net basis, whether investors chose to use GAAP or non-GAAP accounting.


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