Highlights

  • Atleos shows 67.85% one-year basic EPS growth, a P/E of 18.30 and PEG of 0.00.
  • Second quarter net income attributable to Atleos was $65 million, against $39 million.
  • Atleos agreed to merge with Brink's; closing expected early in the first quarter of 2027.
  • Second quarter total revenue was $1,103 million, against $1,102 million a year earlier.

An undervalued growth stock pairs earnings growth with its P/E and PEG ratios, and NCR Atleos (NYSE:NATL) shows all three: basic earnings per share grew 67.85% over one year, the trailing twelve-month P/E ratio is 18.30 and the PEG ratio, on an expected basis, is 0.00, with shares trading at USD 45.42 on October 28, 2026, down 2.20%. Alongside those figures, the self-directed banking technology company entered a merger agreement with The Brink's Company on February 26, received stockholder approval of the mergers on June 30, and reported second quarter 2026 net income attributable to Atleos of $65 million in early August.

Based in Atlanta, Georgia, and incorporated in Maryland, NCR Atleos describes itself as a financial technology company providing self-directed banking solutions to financial institutions, merchants, manufacturers, retailers and consumers worldwide. It operates through three reportable segments: Self-Service Banking, Network, and Telecommunications and Technology. Its offerings include ATM as a Service, subscription-based software and hardware. The company said it uses AI-powered diagnostics, intelligent dispatch systems and fleet-level performance management to improve ATM availability.

Growth: Second Quarter Earnings, Revenue and Segments

Net income attributable to Atleos was $65 million in the second quarter against $39 million a year earlier, and $87 million for the first six months against $53 million. Basic earnings per share were $0.88 against $0.53 in the quarter and $1.18 against $0.72 for six months. Diluted earnings per share were $0.86 against $0.52.

Total revenue was $1,103 million against $1,102 million, and $2,146 million for six months against $2,081 million, up 3%. The company said software and services revenue, including ATM as a Service, grew while Network revenue fell on lower demand for crypto transactions. Self-Service Banking revenue was $741 million against $732 million, Network revenue was $316 million against $319 million, and Telecommunications and Technology revenue was $41 million in both periods.

Total gross margin was $309 million against $252 million, and income from operations was $156 million against $119 million. The company attributed the gross margin increase to net tariff refunds, product mix in software and services, productivity initiatives and settlement processing, partly offset by higher fuel and memory chip costs.

Valuation: P/E of 18.30, PEG of 0.00 and Cash Generation

The P/E ratio of 18.30 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on an expected basis. Adjusted EBITDA, a non-GAAP measure, was $254 million against $203 million in the quarter and $426 million against $375 million for six months.

Net cash provided by operating activities was $21 million for six months against $98 million. The company cited the timing of cash settlement to merchant partners and other working capital needs. Adjusted free cash flow-unrestricted, a non-GAAP measure, was $3 million against negative $10 million.

Capital and Balance Sheet: Debt, Liquidity and Suspended Repurchases

At June 30, 2026, cash and cash equivalents were $429 million and debt was $2,829 million, with borrowing capacity of $335 million under the revolving credit facility. Debt included $1,350 million of 9.500% senior secured notes due 2029, $1,243 million under term loan facilities and $235 million under the revolver, and $30 million of letters of credit were issued.

The company repurchased approximately 0.4 million shares for $15 million in the first six months and none in the second quarter. About $157 million remained under the $200 million program, which the company suspended in connection with the mergers. It said its cash, operating cash flow and borrowing capacity provide adequate liquidity beyond June 30, 2027.

Disclosed Risks and Outlook

Telecommunications and Technology revenue for six months fell 4% on fewer customer projects. Selling, general and administrative expenses rose 15% to $133 million, and operating expenses included workforce optimization, strategic initiative and acquisition-related costs. The company anticipates that fuel and memory chip costs could remain elevated for the rest of the year, and said further conflict with Iran or similar events could affect delivery in certain markets and raise fuel costs.

Atleos shares liability with Voyix for certain environmental matters, including the Kalamazoo River site, and had accrued $20 million at June 30, 2026.

Under the merger agreement, Brink's will acquire each Atleos share for $30.00 in cash and 0.1574 Brink's shares. The mergers are expected to close early in the first quarter of 2027, subject to customary conditions including regulatory approvals. The filing contains no earnings guidance.