Here's Why Investors Should Hold Euronet (EEFT) in Portfolio Now
Euronet Worldwide, Inc. EEFT is being driven by solid segmental contributions, recovery in travel, product launches and acquisitions coupled with sound cash reserves.
Zacks Rank & Price Performance
Euronet carries a Zacks Rank #3 (Hold), at present.
The stock has gained 18.6% year to date, compared with the industry’s 6.2% growth. The Finance sector and the S&P 500 composite index rallied 2.9% and 14.1%, respectively, in the same time frame.
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Favorable Style Score
EEFT is positioned well for progress, evident by its VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for Euronet’s 2023 earnings is pegged at $7.54 per share, indicating an 15.8% increase from the year-ago reported figure. The same for revenues is $3.7 billion, implying 9.6% growth from the prior-year number.
The consensus estimate for 2024 earnings is pegged at $8.68 per share, suggesting 15.1% growth from the year-ago estimate. The same for revenues stands at $4.1 billion, which indicates a rise of 10.9% from the prior-year estimate.
Impressive Earnings Surprise History
Euronet’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.41%.
Solid Return on Equity
The return on equity for EEFT is currently 29.9%, which is higher than the industry’s average of 15.9%. The figure substantiates the company’s efficiency in utilizing shareholders’ funds.
Business Tailwinds
The top line of Euronet continues to benefit on the back of strong contributions from the EFT Processing, epay and Money Transfer segments. Revenues have witnessed consistent growth since 2009 except for the year 2020 wherein it suffered due to COVID inflicted volatilities on the EFT business.
Rebounding travel drives domestic and international withdrawal transactions, thereby placing the EFT business well for growth in the days ahead. While the consistent expansion of digital branded payments and mobile growth provides an impetus to the performance of the epay segment, an increase in U.S.-outbound transactions and international-originated money transfers aid the Money Transfer unit.
Based on travel recovery and strength exhibited in the form of solid transaction growth trends across epay and Money Transfer segments, management remains optimistic to achieve record revenue and adjusted earnings per share in 2023.
Euronet makes sincere efforts to expand the product portfolio of its segments. In April 2023, the epay unit introduced a cloud-based platform, Skylight, built with the help of analytics to ease the detection of compliance issues in regulated financial transactions within money services businesses like retailers, digital banks and fintech.
EEFT also relies on an inorganic growth strategy services through which it aims to develop new products and services, boost revenues as well as solidify its geographical presence. Also, a booming digital economy spurs growth in contactless payments, which lays the perfect ground for Euronet to capitalize on as an electronic payment and transaction processing solutions provider.
EEFT has a sound financial position in place to sustain its record of active pursuit of growth-related initiatives. It comprised sound cash reserves of $1,065.8 million as of Mar 31, 2023, which are sufficient to service its meager short-term debt obligations. Adequate cash-generating abilities enable Euronet to pursue uninterrupted business investments.
Stocks to Consider
Some better-ranked stocks in the Finance space are First Citizens BancShares, Inc. FCNCA, Americold Realty Trust, Inc. COLD and Velocity Financial, Inc. VEL. While First Citizens BancShares sports a Zacks Rank #1 (Strong Buy), Americold Realty Trust and Velocity Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
First Citizens BancShares’ earnings surpassed estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 2.89%. The Zacks Consensus Estimate for FCNCA’s 2023 earnings suggests a surge of 95%, while the same for revenues suggests growth of 56.4% from the corresponding year-ago estimates. The consensus mark for FCNCA’s 2023 earnings has moved 67.2% north in the past 60 days.
The bottom line of Americold Realty Trust beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 8.89%. The Zacks Consensus Estimate for COLD’s 2023 earnings suggests an improvement of 8.1% from the year-ago estimate. The consensus mark for COLD’s 2023 earnings has moved 0.8% north in the past 30 days.
Velocity Financial’s earnings outpaced estimates in two of the last four quarters, missed the mark once and matched the same in the remaining one occasion, the average surprise being 4.66%. The Zacks Consensus Estimate for VEL’s 2023 earnings suggests an improvement of 12.9% while the same for revenues suggests growth of 23.5% from the corresponding year-ago estimates. The consensus mark for VEL’s 2023 earnings has moved 14.8% north in the past seven days.
Shares of First Citizens BancShares, Americold Realty Trust and Velocity Financial have gained 72.5%, 9.5% and 21.8%, respectively, year to date.
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First Citizens BancShares, Inc. (FCNCA) : Free Stock Analysis Report
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
Americold Realty Trust Inc. (COLD) : Free Stock Analysis Report
Velocity Financial, Inc. (VEL) : Free Stock Analysis Report
