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Bear of the Day: QIWI plc (QIWI)

Kevin Cook
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QIWI plc (QIWI) is a $700 million provider of next generation payment services primarily in Russia. The company has an integrated network that facilitates payment services across physical, online and mobile channels.

The QIWI network enables merchants to accept cash and electronic payments from virtual wallets, and operates cash-collecting terminals and kiosks. QIWI plc is based in Moscow and went public in 2013.

I last wrote about QIWI as the Bear of the Day in August when shares were trading $17.50. After that, the stock slid to new 10-month lows under $14 by December.

The reason that QIWI is in the cellar of the Zacks Rank again is that earnings estimates recently took a big hit. In the past 30 days, the full-year 2018 EPS consensus dropped 12% from $1.20 to $1.08, representing -6% growth.

But 2019 profit projections were slashed by 29% from $2.17 to $1.54. While this figure still represents over 42% growth, it may be also be a mirage if history is any guide.

To tell the tale of a "serial earnings decliner" with a picture, here's the Zacks proprietary Price & Consensus chart which plots the stock price against changes in annual EPS projections...

The pattern is clear of optimistic analyst estimates a year or so out that inevitably get drastically cut.

What the company has going for it is a strong recovery in sales growth, with a 14% advance to $260 million expected again this year.

And while next year's revenue forecast of $305 million would be 17% growth, investors should wait and watch for the EPS estimates to make a solid turn before investing in QIWI.

The Zacks Rank will let you know.

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