Here's Why You Should Retain Euronet (EEFT) Stock for Now
Euronet Worldwide, Inc. EEFT is currently aided by strong segmental contribution, an enhanced payment solutions suite, acquisitions and a notable financial stand.
Zacks Rank & Price Rally
Euronet currently carries a Zacks Rank #3 (Hold).
The stock has gained 23.7% in the past three months compared with the industry’s 12.4% growth. The Zacks Finance sector and S&P 500 composite gained 10.7% and 9.8%, respectively, in the said time frame.
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Favorable Style Score
EEFT is well-poised for progress, as evidenced by its impressive VGM Score of A. 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 $7.35 per share, indicating a 12.9% increase from the year-ago reported figure. The consensus mark for revenues is $3.7 billion, implying 9.2% growth from the year-ago number.
The Zacks Consensus Estimate for 2024 earnings is pegged at $8.28 per share, suggesting 12.7% growth from the 2023 estimate. The consensus mark for revenues is $4 billion, which indicates a rise of 7.8% from the 2023 estimate.
Impressive Earnings Surprise History
The bottom line of EEFT outpaced estimates in each of the trailing four quarters, the average surprise being 4.74%.
Solid Return on Equity
Euronet’s efficiency in utilizing shareholders’ funds can be substantiated by its return on equity of 27.8% as of Sep 30, 2023, which remains higher than the industry’s average of 19.9%.
Business Tailwinds
The top line of Euronet gained on the back of strong contributions from the EFT Processing, epay and Money Transfer segments. It improved 9.5% year over year in the first nine months of 2023. Management anticipates adjusted earnings per share to witness 10-15% year-over-year growth in 2024.
The EFT Processing segment is aided by higher domestic and international cash withdrawal transactions, improved low-value point-of-sale transactions in Europe and increase in low-value payment processing transactions in the Asia Pacific. The unit processed total transactions of 6.1 million in the first nine months of 2023, which climbed 32% year over year.
Consistent expansion of digital branded payments and mobile growth aids the performance of the epay segment while higher U.S.-outbound transactions, direct-to-consumer digital transactions and international-originated money transfers drive the Money Transfer segment’s performance.
Euronet resorts to acquisitions, which have meaningfully contributed to the growth of its business in the form of developing new products and services as well as expanding its geographical presence. The widespread adoption of contactless payments provides EEFT an opportunity to capitalize on through its innovative payment solutions.
An enhanced payment, transaction processing and distribution solutions suite make it a favorite choice for partnerships with financial service providers, agents, retailers, merchants, content providers and individual consumers. In this regard, EEFT’s REN platform, which delivers an array of services comprising payment processing, card issuing, loyalty services, inventory management, fraud management and many more, deserves a special mention.
In November 2023, Euronet entered into a multi-year collaboration with the leading private bank of Ecuador, Banco Pichincha, to offer prepaid and debit card issuing and processing services to the bank. The delivery of these services will be made possible through software as a service installation of the REN platform.
A sound cash balance and solid cash-generating abilities bear testament to EEFT’s financial strength based on which it can undertake business investments. It generated operating cash flows of $507.4 million in the first nine months of 2023, which improved 13.1% year over year from the prior-year comparable period.
Stocks to Consider
Some better-ranked stocks in the Finance space are BrightSpire Capital, Inc. BRSP, EastGroup Properties, Inc. EGP and BlackRock Capital Investment Corporation BKCC. While BrightSpire Capital currently sports a Zacks Rank #1 (Strong Buy), EastGroup Properties and BlackRock Capital carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSpire Capital’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 11.60%. The Zacks Consensus Estimate for BRSP’s 2023 earnings suggests an improvement of 6.1% from the year-ago reported figure. The consensus mark for BRSP’s 2023 earnings has moved 2% north in the past 30 days.
The bottom line of EastGroup Properties beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 1.10%. The Zacks Consensus Estimate for EGP’s 2023 earnings suggests an improvement of 10% from the year-ago reported figure. The consensus mark for revenues suggests growth of 16.7% from the year-ago reported figure. The consensus mark for EGP’s 2023 earnings has moved 0.7% north in the past 60 days.
BlackRock Capital’s earnings outpaced estimates in each of the last four quarters, the average surprise being 12.18%. The Zacks Consensus Estimate for BKCC’s 2023 earnings suggests an improvement of 22.5% from the year-ago reported figure. The consensus mark for revenues suggests growth of 38.7% from the year-ago reported figure. The consensus mark for BKCC’s 2023 earnings has moved 2.1% north in the past 60 days.
Shares of BrightSpire Capital, EastGroup Properties and BlackRock Capital have gained 17%, 9% and 1.8%, respectively, in the past three months.
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Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
BlackRock Capital Investment Corporation (BKCC) : Free Stock Analysis Report
BrightSpire Capital, Inc. (BRSP) : Free Stock Analysis Report
