DBD - Embedded Expectations Analysis - 2021 01 06
Diebold Nixdorf, Incorporated (DBD:USA) currently trades below historical averages relative to UAFRS-based (Uniform) earnings, with a 15.2x Uniform P/E. Even at these levels, the market has bullish expectations for the firm, but management may have concerns about growth, DN Now, and the AllConnect Data EngineSpecifically, management may lack confidence in their ability to invest in growth, grow product sales in Q4, and mitigate Eurasia Banking revenue declines. Additionally, they may have concerns about the coronavirus's impact on their revenue outlook, the sustainability of ATM orders, and service call costs. Furthermore, management may lack confidence in their ability to sustain operating profit growth, execute on self-checkout device deals, and meet their savings guidance from the DN Now Transformation. Finally, they may be exaggerating the capabilities of the AllConnect Data Engine, and they may be concerned about the terms of their recent debt refinancing
Diebold Nixdorf is engaged in enabling Connected Commerce?. The company automates, digitizes and transforms the way people bank and shop. The company's integrated solutions connect digital and physical channels for consumers. The company's operating structure is focused on its two customer segments consisting of Banking and Retail. The products for banking customers consist of cash recyclers and dispensers, deposit terminals, teller automation and kiosk technologies, as well as physical security solutions. The retail product portfolio includes modular, integrated and mobile point of sale and self-checkout terminals that meet automation and omnichannel requirements of consumers.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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