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Euronet Worldwide (EEFT) Up 2.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have added about 2.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Euronet Worldwide due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Euronet Earnings Miss Estimates in Q1, Down Y/Y
Euronet's adjusted earnings of 23 cents per share missed the Zacks Consensus Estimate by 34.3%. The bottom line also slumped 58% year over year.
It reported a net loss of 16 cents per share in the first quarter against the prior-year quarter’s net income of 4 cents.
The company’s results suffered a blow from elevated costs and lower revenues reported across the company’s EFT Processing segment.
Nevertheless, higher revenues across the company’s epay and Money Transfer segments provided a boost to its top line growth in the quarter.
Total revenues improved 12% year over year to $652.7 million in the quarter under review. Further, the top line outpaced the Zacks Consensus Estimate by 6.2%.
In the first quarter, operating income amounted to $10.4 million, which declined 67% year over year.
Total operating expenses increased 16.3% year over year to $642.3 million due to rise in direct operating costs, salaries and benefits and, depreciation and amortization.
Segmental Results
The EFT Processing Segment’s total revenues of $87.1 million declined 40% (down 43% on a constant currency basis) year over year due to reduced high-value cross-border transactions across Europe and the Asia Pacific. This was on account of COVID-19 pandemic-induced border closures and lockdowns imposed by the governments. Nevertheless, the segment was partly benefited by higher low-value point-of-sale transactions across Europe.
Adjusted EBITDA came in at a negative figure of $18.1 million in the quarter, which compared unfavorably with the prior-year quarter’s figure of $25.2 million. Operating loss of $40.1 million compared unfavorably with the year-ago quarter’s operating income of $4.9 million. Nevertheless, this segment’s total transactions of 925 million rose 18% year over year in the first quarter.
The epay Segment’s total revenues of $242.3 million surged 40% year over year (up 33% on a constant currency basis) attributable to constant digital media content and mobile growth across specific markets. Adjusted EBITDA totaled $31.3 million, which soared 71% year over year (up 61% on a constant currency basis). Operating income amounted to $29.2 million, reflecting year-over-year surge of 77% (up 67% on a constant currency basis). Reported transactions advanced 49% year over year to 667 million in the quarter attributable to customer growth across South America and Asia equipped with increased volume of low value in-app mobile top-up transactions.
The Money Transfer Segment’s total revenues of $324.9 million rose 22% year over year (up 17% on a constant currency basis) in the quarter. The upside can be attributed to constant network expansion coupled with direct-to-consumer digital transactions witnessing triple-digit growth, which resulted in improving U.S. outbound and international-originated money transfers. However, it was partly offset by headwinds from U.S. domestic business.
Adjusted EBITDA was $44.4 million in the quarter under review, which climbed 44% year over year (up 34% on a constant currency basis).
Operating income totaled $35.3 million, which surged 58% year over year (up 47% on constant currency basis). This segment’s total transactions rose 14% year over year to 31.2 million in the first quarter.
Corporate and Other reported an expense of $14 million for the quarter, which increased 15.7% year over year primarily due to rise in short and long-term compensation expense.
Financial Update
As of Mar 31, 2021, total assets totaled $4.4 billion, which plunged 11.7% from the level at 2020 end.
Cash and cash equivalents of $1.1 billion at the end of the first quarter fell 19.4% from 2020-end level.
Debt obligations, net of current portion, slipped 20.5% from the level as of Dec 31, 2020 to $1.1 billion in the quarter under review.
Second-Quarter Outlook
After having a look at the prevailing business trends and current COVID-19 management mandates, Euronet anticipates its adjusted EBITDA for second-quarter 2021 to be around $75-$85 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Euronet Worldwide has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Euronet Worldwide has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Euronet Worldwide (EEFT) Up 2.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have added about 2.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Euronet Worldwide due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Euronet Earnings Miss Estimates in Q1, Down Y/Y
Euronet's adjusted earnings of 23 cents per share missed the Zacks Consensus Estimate by 34.3%. The bottom line also slumped 58% year over year.
It reported a net loss of 16 cents per share in the first quarter against the prior-year quarter’s net income of 4 cents.
The company’s results suffered a blow from elevated costs and lower revenues reported across the company’s EFT Processing segment.
Nevertheless, higher revenues across the company’s epay and Money Transfer segments provided a boost to its top line growth in the quarter.
Total revenues improved 12% year over year to $652.7 million in the quarter under review. Further, the top line outpaced the Zacks Consensus Estimate by 6.2%.
In the first quarter, operating income amounted to $10.4 million, which declined 67% year over year.
Total operating expenses increased 16.3% year over year to $642.3 million due to rise in direct operating costs, salaries and benefits and, depreciation and amortization.
Segmental Results
The EFT Processing Segment’s total revenues of $87.1 million declined 40% (down 43% on a constant currency basis) year over year due to reduced high-value cross-border transactions across Europe and the Asia Pacific. This was on account of COVID-19 pandemic-induced border closures and lockdowns imposed by the governments. Nevertheless, the segment was partly benefited by higher low-value point-of-sale transactions across Europe.
Adjusted EBITDA came in at a negative figure of $18.1 million in the quarter, which compared unfavorably with the prior-year quarter’s figure of $25.2 million. Operating loss of $40.1 million compared unfavorably with the year-ago quarter’s operating income of $4.9 million. Nevertheless, this segment’s total transactions of 925 million rose 18% year over year in the first quarter.
The epay Segment’s total revenues of $242.3 million surged 40% year over year (up 33% on a constant currency basis) attributable to constant digital media content and mobile growth across specific markets. Adjusted EBITDA totaled $31.3 million, which soared 71% year over year (up 61% on a constant currency basis). Operating income amounted to $29.2 million, reflecting year-over-year surge of 77% (up 67% on a constant currency basis). Reported transactions advanced 49% year over year to 667 million in the quarter attributable to customer growth across South America and Asia equipped with increased volume of low value in-app mobile top-up transactions.
The Money Transfer Segment’s total revenues of $324.9 million rose 22% year over year (up 17% on a constant currency basis) in the quarter. The upside can be attributed to constant network expansion coupled with direct-to-consumer digital transactions witnessing triple-digit growth, which resulted in improving U.S. outbound and international-originated money transfers. However, it was partly offset by headwinds from U.S. domestic business.
Adjusted EBITDA was $44.4 million in the quarter under review, which climbed 44% year over year (up 34% on a constant currency basis).
Operating income totaled $35.3 million, which surged 58% year over year (up 47% on constant currency basis). This segment’s total transactions rose 14% year over year to 31.2 million in the first quarter.
Corporate and Other reported an expense of $14 million for the quarter, which increased 15.7% year over year primarily due to rise in short and long-term compensation expense.
Financial Update
As of Mar 31, 2021, total assets totaled $4.4 billion, which plunged 11.7% from the level at 2020 end.
Cash and cash equivalents of $1.1 billion at the end of the first quarter fell 19.4% from 2020-end level.
Debt obligations, net of current portion, slipped 20.5% from the level as of Dec 31, 2020 to $1.1 billion in the quarter under review.
Second-Quarter Outlook
After having a look at the prevailing business trends and current COVID-19 management mandates, Euronet anticipates its adjusted EBITDA for second-quarter 2021 to be around $75-$85 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Euronet Worldwide has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Euronet Worldwide has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.