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Why Is Euronet Worldwide (EEFT) Down 9.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have lost about 9.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Euronet Worldwide due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Euronet’s Q1 Earnings and Revenue Miss Estimates
Euronet reported first-quarter 2022 adjusted earnings of 69 cents per share, which lagged the Zacks Consensus Estimate by 2.8%. Notably, the bottom line increased three-fold year over year.
EEFT reported a net income of 17 cents per share in the first quarter against the prior-year quarter’s net loss of 16 cents.
Total revenues of nearly $719 million rose 10% year over year or 15% on a constant-currency basis. Yet, the top line missed the consensus mark by a whisker.
Operating income amounted to $36.7 million, which increased more than three-fold year over year in the quarter under review. Total operating expenses of $681.8 million escalated 6% year over year.
Adjusted EBITDA rose 52% year over year to $79.5 million in the first quarter.
Segmental Performance
The EFT Processing Segment reported total revenues of $145.6 million, which soared 67% year over year (up 77% on a constant currency basis).
Adjusted EBITDA was $16 million against the prior-year quarter’s negative figure of $18.1 million. The segment’s operating loss of $6.3 million narrowed from the year-ago quarter’s loss of $40.1 million. Total transactions of the segment witnessed a 44% year-over-year rise to 1,328 million in the first quarter.
Revenues of the epay Segment slid 3% year over year but rose the same percentage on a constant-currency basis to $235.8 million.
Adjusted EBITDA was $27.9 million, which fell 11% year over year in the first quarter.
Operating income declined 10% year over year to $26.2 million. Transactions witnessed a 30% year-over-year increase to 864 million.
The Money Transfer Segment’s total revenues amounted to $339 million, which advanced 4% year over year (up 8% on a constant-currency basis) in the quarter.
Adjusted EBITDA dropped 5% year over year to $42.2 million in the quarter under review. Operating income of $33.3 million decreased 6% year over year. Total transactions grew 7% year over year to 33.5 million in the first quarter.
Corporate and Other reported expenses of $16.5 million, which escalated 17.9% year over year due to increased short and long-term compensation expenses.
Financial Update (as of Mar 31, 2022)
Euronet exited the first quarter with cash and cash equivalents of $986.5 million, which decreased 21.7% from the 2021 end. Total assets of $4.9 billion increased 3.2% from the 2021 end.
Debt obligations, net of current portion, elevated 24.1% from the level as of Dec 31, 2021, to $1.8 billion. Equity of $1.1 billion dropped 8.9% from the 2021-end level. At the end of the first quarter, around $400 million was available under its revolving credit facilities.
Net cash provided by operating activities was $5.7 million against the prior-year quarter’s net cash used in operating activities of $2.6 million.
Share Repurchase Update
Euronet bought back shares worth $70.5 million in the first quarter.
Q2 Outlook
Adjusted EBITDA is anticipated to be between $150 million and $160 million for the second quarter, the mid-point of which indicates that it will double year over year.
2022 Guidance
Management expects the epay segment to witness low-double-digit earnings growth this year.
Operating margins of the Money Transfer segment are likely to improve in the second half of 2022.
Owing to the second-quarter guidance and the continued rebounding of the tourism sector, management remains optimistic about 2022 earnings remaining in line with the 2019 reported level in spite of the recent FX headwinds.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Euronet Worldwide has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Euronet Worldwide has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Euronet Worldwide (EEFT) Down 9.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have lost about 9.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Euronet Worldwide due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Euronet’s Q1 Earnings and Revenue Miss Estimates
Euronet reported first-quarter 2022 adjusted earnings of 69 cents per share, which lagged the Zacks Consensus Estimate by 2.8%. Notably, the bottom line increased three-fold year over year.
EEFT reported a net income of 17 cents per share in the first quarter against the prior-year quarter’s net loss of 16 cents.
Total revenues of nearly $719 million rose 10% year over year or 15% on a constant-currency basis. Yet, the top line missed the consensus mark by a whisker.
Operating income amounted to $36.7 million, which increased more than three-fold year over year in the quarter under review. Total operating expenses of $681.8 million escalated 6% year over year.
Adjusted EBITDA rose 52% year over year to $79.5 million in the first quarter.
Segmental Performance
The EFT Processing Segment reported total revenues of $145.6 million, which soared 67% year over year (up 77% on a constant currency basis).
Adjusted EBITDA was $16 million against the prior-year quarter’s negative figure of $18.1 million. The segment’s operating loss of $6.3 million narrowed from the year-ago quarter’s loss of $40.1 million. Total transactions of the segment witnessed a 44% year-over-year rise to 1,328 million in the first quarter.
Revenues of the epay Segment slid 3% year over year but rose the same percentage on a constant-currency basis to $235.8 million.
Adjusted EBITDA was $27.9 million, which fell 11% year over year in the first quarter.
Operating income declined 10% year over year to $26.2 million. Transactions witnessed a 30% year-over-year increase to 864 million.
The Money Transfer Segment’s total revenues amounted to $339 million, which advanced 4% year over year (up 8% on a constant-currency basis) in the quarter.
Adjusted EBITDA dropped 5% year over year to $42.2 million in the quarter under review. Operating income of $33.3 million decreased 6% year over year. Total transactions grew 7% year over year to 33.5 million in the first quarter.
Corporate and Other reported expenses of $16.5 million, which escalated 17.9% year over year due to increased short and long-term compensation expenses.
Financial Update (as of Mar 31, 2022)
Euronet exited the first quarter with cash and cash equivalents of $986.5 million, which decreased 21.7% from the 2021 end. Total assets of $4.9 billion increased 3.2% from the 2021 end.
Debt obligations, net of current portion, elevated 24.1% from the level as of Dec 31, 2021, to $1.8 billion. Equity of $1.1 billion dropped 8.9% from the 2021-end level. At the end of the first quarter, around $400 million was available under its revolving credit facilities.
Net cash provided by operating activities was $5.7 million against the prior-year quarter’s net cash used in operating activities of $2.6 million.
Share Repurchase Update
Euronet bought back shares worth $70.5 million in the first quarter.
Q2 Outlook
Adjusted EBITDA is anticipated to be between $150 million and $160 million for the second quarter, the mid-point of which indicates that it will double year over year.
2022 Guidance
Management expects the epay segment to witness low-double-digit earnings growth this year.
Operating margins of the Money Transfer segment are likely to improve in the second half of 2022.
Owing to the second-quarter guidance and the continued rebounding of the tourism sector, management remains optimistic about 2022 earnings remaining in line with the 2019 reported level in spite of the recent FX headwinds.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Euronet Worldwide has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Euronet Worldwide has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.