2. NCR Voyix Corporation (NYSE:VYX)
Number of Hedge Fund Holders: 43
Market Capitalization as of October 10, 2024: $1.97 Billion
NCR Voyix Corporation (NYSE:VYX) is an IT company that offers a cloud-based platform and other solutions to retail stores and restaurants. On average, the company facilitates 26 million transactions per hour and sells 1.2 billion items per month. It has over 75,000 retail lines and more than 30,000 restaurant sites on its platform. Some of its leading customers include Walmart, Target, Circle K, and Fifth Group.
The company made several strategic moves during the second quarter. NCR Voyix Corporation (NYSE:VYX) signed an agreement to sell its digital banking segment to Veritas Capital for $2.45 billion. The deal is expected to close before the end of 2024. NCR Voyix Corporation (NYSE:VYX) also signed an agreement to transition its hardware business to an outsourced design and manufacturing model, Ennoconn Corporation. NCR will continue to sell its hardware products as a sales agent while leveraging Ennoconn’s scale of operations and hardware design expertise.
The company’s go-forward strategy is to acquire new customers and optimize resources. During the second quarter of 2024, 220 new restaurants and 45 new retail customers signed up for NCR’s services. To align with this goal, NCR Voyix Corporation (NYSE:VYX) also established programs to realize cost reductions. During the same quarter, the company eliminated nearly $75 million in annualized labor costs. Once the sale of its digital banking segment is closed, the company will realize an additional $30 million reduction in annual non-payroll cost reduction.
Overall, NCR Voyix Corporation (NYSE:VYX) has experienced rapid growth along with significant cost reductions. The company has strong fundamentals and expects to generate between $3.6 billion to $3.7 billion in revenue for the fiscal year 2024.
ClearBridge Investments’ ClearBridge Mid Cap Strategy stated the following regarding NCR Voyix Corporation (NYSE:VYX) in its first quarter 2024 investor letter:
“Stock selection in the IT sector also weighed on performance. Investor excitement for AI has driven outperformance in hypergrowth companies but weighed on several of our holdings with more conservative outlooks, which are typically appropriate this early in the year. This included NCR Voyix Corporation (NYSE:VYX), which provides software, consulting and technology services for digital commerce and automatic teller machines (ATMs). Under new direction since the spinoff of NCR Atleos in the fourth quarter of 2023, the stock is still looking for solidification of its investor base. However, we are encouraged by the company’s focus on recurring revenue streams, which should allow it to grow at an attractive pace. Additionally, we believe that NCR Voyix’s current valuation is approximately equivalent to the value of its digital banking segment alone, which should merit further upward price movement.”
