Northern, WI 4/30/12 (StreetBeat) -- Verifone Systems Inc's (NYSE: PAY) shares fell 10.5 percent after Deutsche Bank questioned the company's organic growth projections and downgraded its stock.Deutsche Bank said Verifone overstated its revenue growth for the first quarter as most of the revenue increase came from selling its own legacy products to customers from the acquired Hypercombusiness.
"Verifone's organic growth is inflated by recognizing Verifone sales to legacy Hypercom customers as organic growth (possibly doing so for other acquisitions too), but often is essentially cannibalizing Hypercom product sales," Deutsche Bank analyst Bryan Keane wrote in a note.
The credit card swipe machine maker completed its acquisition of U.S.-rival Hypercom late last-year after agreeing to divest part of the legacy Hypercom business to address anti-trust concerns.
The brokerage downgraded Verifone to "sell" from "hold" and reduced its price target on the company's stock to $40 from $44.
Verifone shares fell to a low of $48.75 in early trade on Monday morning on the New York Stock Exchange. They were later down almost 10 percent at $49.72 on the.
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