UPDATE: Compass Point Initiates Coverage of VeriFone Systems with Neutral Rating, $38 PT

In a report published Friday, Compass Point Research & Trading initiated coverage of VeriFone Systems (NYSE: PAY) with a Neutral rating and a $38.00 price target.

Compass Point noted, “We are initiating coverage of PAY with a Neutral rating and a $38PT equal to 14x our estimate of this year's EPS. In the past three months shares are down about 46% from top tick to bottom tick versus S&P500 down just 4% following accounting concerns, weak free cash flow, and foreign currency headwinds justifying our initial caution. Yet, long-term fundamentals are attractive and the company expects to double revenues from $1.5B to $3B by FY2015, presenting the opportunity to potentially be more optimistic.”

VeriFone Systems closed yesterday at $35.41.