Will Solid Transaction Growth Aid Euronet's (EEFT) Q4 Earnings?
Euronet Worldwide, Inc. EEFT is scheduled to release fourth-quarter 2023 results on Feb 7, 2024, before the opening bell.
Q4 Estimates
The Zacks Consensus Estimate for Euronet’s fourth-quarter earnings per share is pegged at $1.75, which indicates a 25.9% improvement from the year-ago quarter’s reported figure and is in line with management's expectation.
The consensus mark for revenues is pegged at $937 million, suggesting 8.2% growth from the year-ago quarter’s reported number.
Earnings Surprise History
Euronet boasts a solid earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 4.74%. This is depicted in the chart below:
Euronet Worldwide, Inc. Price and EPS Surprise
Euronet Worldwide, Inc. price-eps-surprise | Euronet Worldwide, Inc. Quote
Factors at Play
EEFT’s revenues are likely to have gained on the back of strong contributions from EFT Processing, epay and Money Transfer segments in the fourth quarter. The EFT Processing unit is anticipated to have benefited from a continually expanding point-of-sale ("POS") acquiring business and a well-established footprint across Asia. This, in turn, is expected to have fetched transaction growth for the company.
The Zacks Consensus Estimate for EFT Processing revenues is pegged at $223 million, which implies 6.2% growth from the year-ago quarter’s reported figure. The consensus mark for fourth-quarter transactions in the segment suggests 19.8% growth from the year-ago quarter’s reported figure.
Continued growth in the digital media content and prepaid mobile markets are likely to have aided the epay segment’s performance in the to-be-reported quarter. The Zacks Consensus Estimate for fourth-quarter revenues in the unit is $298 million, which indicates an improvement of 4.2% from the year-ago quarter’s reported figure. The consensus mark for the segment’s transactions hints toward a 13% rise from the year-ago quarter’s reported number.
The Money Transfer segment’s performance is expected to have been driven by an increase in the number of U.S.-outbound transactions and international-originated money transfers in the fourth quarter. Transaction growth within the unit is likely to have received an impetus from growth in direct-to-consumer digital transactions.
The Zacks Consensus Estimate for Money Transfer unit’s fourth-quarter revenues is pegged at $418 million, suggesting 12.4% growth from the year-ago quarter’s reported figure. The consensus mark for transactions implies a rise of 14.1% from the year-ago quarter’s reported figure.
However, Euronet’s margins are likely to have taken a hit from elevated operating expenses, which in turn, is expected to have stemmed from inflationary challenges. A decline in EEFT’s most profitable international transactions derived from Croatia, as a result of the country’s currency replacement from kuna to the euro, is also expected to have dampened bottom-line results in the to-be-reported quarter.
What our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Euronet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: Euronet has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: EEFT currently carries a Zacks Rank of 2.
Stocks to Consider
While an earnings beat looks uncertain for Euronet, here are some companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
Realty Income Corporation O has an Earnings ESP of +2.80% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for O’s fourth-quarter 2023 earnings is pegged at $1.02 per share, suggesting 2% growth from the year-ago quarter’s reported figure.
Realty Income’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 0.28%.
Ventas, Inc. VTR currently has an Earnings ESP of +0.82% and a Zacks Rank of 2. The Zacks Consensus Estimate for VTR’s fourth-quarter 2023 earnings is pegged at 76 cents per share, which indicates an improvement of 4.1% from the prior-year quarter’s reported figure.
Ventas’ bottom line beat estimates in each of the trailing four quarters, the average surprise being 2.45%.
CME Group Inc. CME has an Earnings ESP of +0.10% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for CME’s fourth-quarter 2023 earnings is pegged at $2.27 per share, suggesting 18.2% growth from the year-ago quarter’s reported figure.
CME Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 2.73%.
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CME Group Inc. (CME) : Free Stock Analysis Report
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Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
