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Euronet (EEFT) Rises 20.9% in 3 Months: More Room for Growth?
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Euronet Worldwide, Inc.’s (EEFT - Free Report) shares have climbed 20.9% in the past three months compared with a 3.9% rise of the industry. Growth in EFT Processing, epay and Money Transfer businesses are driving the stock. With its digital efforts and global expansions, the company has positioned itself for better returns in the future.
Image Source: Zacks Investment Research
Headquartered in Leawood, KS, Euronet is a leading electronic payments provider. The company offers payment and transaction processing, and distribution solutions to financial institutions, retailers, consumers, and service providers. It has a market cap of $4.6 billion.
Growth Ahead
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 is pegged at $6.34, signaling a 71.8% year-over-year increase, while our estimate suggests 72.5% growth.
The Zacks Consensus Estimate for 2022 revenues is pegged at $3.4 billion, indicating a 12.1% year-over-year rise, while our estimate suggests 11.8% growth.
This Zacks Rank #3 (Hold) company’s initiatives to boost its digital presence across countries are playing a crucial role in its growth. Moves like acquiring more clients for its Ren Payments Platform can increase utilization and set the company up for long-term growth. Per a recent deal, the platform is expected to work as the foundational technology for Indonesian digital bank Bank Neo Commerce or BNC’s digital payments transformation plan. This will bring more traffic to EEFT’s network.
Euronets’ full-service payment provider epay recently launched an innovative QR code payment service with UnionPay, a major Chinese state-owned card payment network, in Europe. This move is expected to benefit epay’s strong distribution network and significantly increase Europe volumes. Going ahead, the segment is expected to witness higher transactions, and the expansion of digital media products and SaaS solutions.
While Europe contributes the lion’s share to Euronet’s top line, its expanding presence in the fast-growing Asia Pacific region will be a major growth driver. Our estimate for 2022 revenues from this region indicates 8% year-over-year growth. Further, our estimate for revenues from its North American business indicates 3.6% growth for this year.
The EFT Processing segment is expected to continue witnessing significant increases in transaction volumes in the coming quarters, boosting profit levels. Adjusted EBITDA from the segment jumped 130.9% in 2021. Our estimate suggests the metric to be more than double this year.
Risks
Despite the upside potential, there are a few factors that can play spoilsport. Rising expenses are weighing on EEFT's margins. Our estimate suggests 6% growth in the total operating costs for this year. Also, the forward 12-month price-to-earnings ratio of 13.92X compares unfavorably with the industry average of 10.25X, triggering a concern regarding its valuation.
Based in Toronto, CI Financial is a leading asset management holding company. The Zacks Consensus Estimate for CIXX’s next-year earnings indicates an 11.9% year-over-year increase.
Headquartered in Milwaukee, WI, MGIC Investment provides private mortgage insurance and other products in the domestic markets and internationally. The Zacks Consensus Estimate for MTG’s current-year earnings indicates a 49.7% increase from the prior-year reported number.
Based in Chattanooga, TN, Unum is a financial protection benefit solutions provider. The Zacks Consensus Estimate for UNM’s 2022 bottom line indicates a 43.5% improvement from a year ago.
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Euronet (EEFT) Rises 20.9% in 3 Months: More Room for Growth?
Euronet Worldwide, Inc.’s (EEFT - Free Report) shares have climbed 20.9% in the past three months compared with a 3.9% rise of the industry. Growth in EFT Processing, epay and Money Transfer businesses are driving the stock. With its digital efforts and global expansions, the company has positioned itself for better returns in the future.
Image Source: Zacks Investment Research
Headquartered in Leawood, KS, Euronet is a leading electronic payments provider. The company offers payment and transaction processing, and distribution solutions to financial institutions, retailers, consumers, and service providers. It has a market cap of $4.6 billion.
Growth Ahead
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 is pegged at $6.34, signaling a 71.8% year-over-year increase, while our estimate suggests 72.5% growth.
The Zacks Consensus Estimate for 2022 revenues is pegged at $3.4 billion, indicating a 12.1% year-over-year rise, while our estimate suggests 11.8% growth.
This Zacks Rank #3 (Hold) company’s initiatives to boost its digital presence across countries are playing a crucial role in its growth. Moves like acquiring more clients for its Ren Payments Platform can increase utilization and set the company up for long-term growth. Per a recent deal, the platform is expected to work as the foundational technology for Indonesian digital bank Bank Neo Commerce or BNC’s digital payments transformation plan. This will bring more traffic to EEFT’s network.
Euronets’ full-service payment provider epay recently launched an innovative QR code payment service with UnionPay, a major Chinese state-owned card payment network, in Europe. This move is expected to benefit epay’s strong distribution network and significantly increase Europe volumes. Going ahead, the segment is expected to witness higher transactions, and the expansion of digital media products and SaaS solutions.
While Europe contributes the lion’s share to Euronet’s top line, its expanding presence in the fast-growing Asia Pacific region will be a major growth driver. Our estimate for 2022 revenues from this region indicates 8% year-over-year growth. Further, our estimate for revenues from its North American business indicates 3.6% growth for this year.
The EFT Processing segment is expected to continue witnessing significant increases in transaction volumes in the coming quarters, boosting profit levels. Adjusted EBITDA from the segment jumped 130.9% in 2021. Our estimate suggests the metric to be more than double this year.
Risks
Despite the upside potential, there are a few factors that can play spoilsport. Rising expenses are weighing on EEFT's margins. Our estimate suggests 6% growth in the total operating costs for this year. Also, the forward 12-month price-to-earnings ratio of 13.92X compares unfavorably with the industry average of 10.25X, triggering a concern regarding its valuation.
Key Picks in Finance
Some better-ranked stocks in the broader finance space are CI Financial Corp. , MGIC Investment Corporation (MTG - Free Report) and Unum Group (UNM - Free Report) . While CI Financial sports a Zacks Rank #1 (Strong Buy) at the moment, MGIC Investment and Unum have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Based in Toronto, CI Financial is a leading asset management holding company. The Zacks Consensus Estimate for CIXX’s next-year earnings indicates an 11.9% year-over-year increase.
Headquartered in Milwaukee, WI, MGIC Investment provides private mortgage insurance and other products in the domestic markets and internationally. The Zacks Consensus Estimate for MTG’s current-year earnings indicates a 49.7% increase from the prior-year reported number.
Based in Chattanooga, TN, Unum is a financial protection benefit solutions provider. The Zacks Consensus Estimate for UNM’s 2022 bottom line indicates a 43.5% improvement from a year ago.