NCR Atleos (NATL): Unlocking Undervalued Growth Through Greece's ATM Demand and Strategic Innovation

NCR Atleos Corporation (NYSE:NATL) is positioning itself as a global leader in self-service financial infrastructure, leveraging strategic partnerships to capitalize on underserved markets like Greece. With its recent collaboration with DirectPay and iXchange to expand ATM access in Greece—a country where cash withdrawals account for 85% of all financial transactions—NATL is addressing a critical need while demonstrating its ability to scale recurring revenue streams. This move, combined with its robust financial profile and undervalued stock, suggests investors may be overlooking a compelling growth opportunity.

The Greece Opportunity: Cash Still Reigns Supreme

Greece's reliance on cash is unmatched in the Eurozone. According to the European Central Bank's 2024 SPACE study, Greek consumers use ATMs more frequently than any other country in the region. Yet, the nation's ATM network has struggled to keep pace with demand, compounded by the closure of bank branches and the withdrawal of smaller banks from the market. Enter NCR Atleos' Cashzone Network, a partnership with DirectPay and iXchange that aims to deploy advanced ATMs across 1,300+ agent locations. These ATMs are equipped with real-time security features, multi-currency support, and seamless integration with the Allpoint network—NATL's global surcharge-free ATM ecosystem serving 600,000+ machines.

This initiative not only meets immediate demand but also builds a long-term revenue stream through ATM-as-a-Service (ATMaaS), where NCR Atleos manages hardware, software, and maintenance for a subscription fee. In Q1 2025, unique ATMaaS customers rose 40% YoY, driving a 24% revenue increase in this segment. Greece's partnership is a microcosm of NATL's broader strategy: using its technological edge to dominate markets where cash remains king.

Financial Fortitude Amid Macroeconomic Headwinds

Despite a 6.7% YoY decline in total revenue to $980 million in Q1 2025—driven by softness in legacy hardware sales—NATL's recurring revenue model is proving resilient. 76% of revenue now comes from recurring streams (vs. 73% in 2024), including software licenses, maintenance contracts, and services. This shift has bolstered profitability:

• Adjusted EBITDA rose 9% YoY to $175 million, with margins expanding 270 basis points to 17.9%.
• Non-GAAP EPS jumped 56% to $0.64, fueled by cost discipline and operational efficiency.
• The company reaffirmed full-year 2025 guidance, targeting $3.22 non-GAAP EPS (+21–27%) and $794 million Adjusted EBITDA (+7–10% growth).

Even as NATL navigates headwinds like proposed tariffs and Bitcoin transaction declines (a minor part of its Network segment), its focus on high-margin services and global scale—600,000 installed ATMs—positions it to outperform peers.

Valuation: A Discounted Leader in a Growing Sector

NATL trades at a significant discount to peers like Global Payments (GPN) and Fiserv (FISV), despite its strong fundamentals:

• EV/EBITDA of 6.5x vs. 12x for GPN and 15x for FISV.
• P/E of 18.8x compared to 25x for FISV.
• Price/Sales of 0.5x, underscoring its cheapness relative to revenue-generating assets.

Analysts are taking notice. Of the six analysts covering NATL, four rate it a “Buy,” with a median price target of $36.50 (23.5% upside from $29.55) and a bullish outlier target of $60 (+103%). The optimists point to:
1. Scalability of ATMaaS: A 40% YoY customer growth rate suggests this segment could become a $1 billion business by 2026.
2. Global network leverage: The Allpoint network's 600,000+ ATMs create a moat against competitors.
3. Balance sheet resilience: While debt/equity is high (1,096x), the company's $352 million cash balance and reaffirmed free cash flow guidance ($260–300 million in 2025) mitigate near-term risks.

Risks and Considerations

• Debt load: High leverage could strain margins if macroeconomic conditions worsen.
• Regulatory uncertainty: Tariffs or banking reforms could disrupt ATM deployment timelines.
• Legacy business drag: Hardware sales remain volatile, though services now dominate.

Investment Thesis: Buy the Dip, Play the Growth

NCR Atleos is a value play with growth legs. Its undervalued valuation, recurring revenue flywheel, and strategic moves in high-cash-use markets like Greece align with a secular shift toward self-service financial infrastructure. While risks exist, the stock's 35% average analyst upside and low valuation relative to peers make it a compelling contrarian bet.

Action Items:
- Buy: Accumulate shares at current levels, targeting the $30–$32 range.
- Hold: Wait for a pullback below $28 before adding.
- Avoid: Only if macroeconomic tailwinds (e.g., recession, tariffs) accelerate.

NATL's partnership in Greece is more than a regional play—it's a blueprint for how the company can replicate success in other underserved markets. With a stock price lagging its earnings trajectory, now may be the time to bank on this underappreciated leader.