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Euronet (EEFT) Up 10.3% in Past Month: More Room to Run?

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Euronet Worldwide, Inc.’s (EEFT - Free Report) shares have jumped 10.3% in the past month compared with the 1.3% increase of the industry. Growth in Electronic Funds Transfer and Money Transfer businesses and overall economic recovery are driving the stock. It has positioned itself for better returns in the future.

Zacks Investment Research
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Headquartered in Leawood, KS, Euronet is a leading electronics payments provider. The company offers payment and transaction processing and distribution solutions to financial institutions, retailers, consumers as well as service providers. It has a market cap of $6.4 billion.

This Zacks Rank #3 (Hold) company’s initiatives to boost its digital presence across countries are playing a crucial role in its growth. Its digital transactions have been performing well over the past few months. Moves like expanding its digital media content in Australia, launching an app in Lithuania and forging partnerships with Bret Bank in France bode well for the company.

Strategic initiatives such as ATM network participation agreements and the launch of card issuing products poise the company well for growth. Its deal with Vietcom bank to offer pass-through DCC services is a prudent one. Buying Piraeus Bank's merchant-acquiring business in Greece increased its footprint in Europe. Euronet also signed an agreement with the Bank of the Philippine Islands, OTP Bank in Romania, BPI, to take over 300 of their existing ATMs. Hence, its strong inorganic growth strategy is impressive.

Thanks to Euronet’s systematic and strategic plan of action, the stock is expected to grow further in the coming days. Its earnings and revenue estimates give us an encouraging picture. The Zacks Consensus Estimate for 2022 earnings per share currently stands at $6.93, signaling an 87.8% year-over-year increase. The Zacks Consensus Estimate for 2022 revenues is pegged at $3.4 billion, indicating a 14% year-over-year rise.

Risks

Despite the upside potential, there are a few factors that can play spoilsport. Rising expenses are weighing on EEFT's margins. Also, lower ROE than the industry average indicates inefficient utilization of shareholder funds.

Key Picks in Finance

Some better-ranked players in the Finance space include Oaktree Specialty Lending Corporation (OCSL - Free Report) , Burford Capital Limited (BUR - Free Report) and Axos Financial, Inc. (AX - Free Report) each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Based in Los Angeles, CA, Oaktree Specialty beat earnings estimates thrice in the last four quarters and met once, with the average surprise being 12.2%. The Zacks Consensus Estimate for Oaktree Specialty’s current-year bottom line is pegged at 68 cents per share, indicating a 6.3% year-over-year rise.

Burford Capital, headquartered in Saint Peter Port, Guernsey, has witnessed one upward earnings estimate revision in the past 60 days against none in the opposite direction. The Zacks Consensus Estimate for Burford Capital’s current-year bottom line is pegged at 98 cents per share, indicating a 372.7% year-over-year rise.

Headquartered in Las Vegas, NV, Axos Financial beat earnings estimates in each of the last four quarters, with the average surprise being 9.6%. The Zacks Consensus Estimate for Axos Financial’s current-year bottom line is pegged at $4 per share, indicating an 8.7% year-over-year rise.

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