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Euronet Worldwide (EEFT) Up 11% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have added about 11% 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 drivers.
Euronet Q4 Earnings Beat on International Transactions
Euronet reported fourth-quarter 2023 adjusted earnings of $1.88 per share, which beat the Zacks Consensus Estimate by 7.4%. The bottom line climbed 35% year over year.
Total revenues advanced 11% year over year, or 7% on a constant-currency basis, to $957.7 million in the quarter under review. The top line outpaced the consensus mark by 2.2%.
The quarterly results received an impetus from the continued rebound in international transactions, wage gains and a prolonged travel season in Europe. The Money Transfer business benefited from growth in retail and digital transactions, and prudent cost management efforts. However, the upside was partly offset by an elevated expense level.
Q4 Update
EEFT’s net income was $1.43 per share, which improved 9.2% year over year in the fourth quarter. Operating income of $97.4 million rose 23% year over year, or 22% on a constant-currency basis.
Total operating expenses increased 9.4% year over year to $860.3 million in the quarter under review due to higher direct operating costs, salaries and benefits and selling, general and administrative expenses.
Adjusted EBITDA advanced 16% year over year, or 14% on a constant-currency basis, to $147.6 million.
Segmental Performances
The EFT Processing segment’s revenues of $237.9 million improved 13% year over year, or 9% on a constant-currency basis, in the fourth quarter. The figure surpassed the Zacks Consensus Estimate of $223 million.
Adjusted EBITDA rose 20% year over year, or 21% on a constant-currency basis, to $52.2 million.
Operating income was $25.5 million in the segment, which climbed 34% year over year, or 40% on a constant-currency basis, in the quarter under review. Also, the unit’s total transactions increased 30% year over year to 2,369 million, higher than the consensus mark of 2,186 million.
The segmental results benefited on the back of an increase in transactions across most of its markets and an expanding merchant acquiring business.
The epay segment recorded revenues of $316.7 million, which improved 11% year over year, or 7% on a constant-currency basis, in the fourth quarter. The figure beat the Zacks Consensus Estimate of $298 million.
Adjusted EBITDA rose 7% year over year, or 3% on a constant-currency basis, to $45.4 million in the quarter under review.
Operating income amounted to $43.6 million, which grew 6% year over year, or 3% on a constant-currency basis. The figure was higher than the consensus mark of $34.8 million. However, transactions fell 4% year over year to 906 million and also fell short of the consensus mark of 1,063 million. The metric was hurt by a decline in low-value transactions across India.
Results in the unit were aided by an increase in digital media and mobile sales. Yet, the upside was partly offset by a decline in promotional activity in the fourth quarter of 2023 compared with the year-ago quarter.
The Money Transfer segment’s revenues were $405.1 million, which improved 9% year over year, or 7% on a constant-currency basis. However, the figure missed the Zacks Consensus Estimate of $418 million.
Adjusted EBITDA of $59.3 million advanced 23% year over year, or 20% on a constant-currency basis, in the fourth quarter.
Operating income climbed 30% year over year, or 27% on a constant-currency basis, to $51.9 million. Yet, the figure lagged the consensus mark of $64 million. Total transactions grew 8% year over year to 42.4 million in the quarter under review but came lower than the consensus mark of 45 million.
Growth in U.S.-outbound transactions and international-originated money transfers contributed to the segment’s quarterly results. The money transfers originated in the Middle East and Asia, and Europe witnessed year-over-year increases of 20% and 8%, respectively. However, the upside was partly offset by lower intra-U.S. business transactions.
Corporate and Other expenses of $23.6 million escalated 12.4% year over year due to an increase in long and short-term compensation costs.
Financial Update (as of Dec 31, 2023)
Euronet exited the fourth quarter with cash and cash equivalents of $1.3 billion, which rose 10.9% from the 2022-end level. Total assets of $5.9 billion grew 9.1% from the figure at 2022 end.
Debt obligations, net of the current portion, were $1.7 billion, up 6.6% from the figure as of Dec 31, 2022. Short-term debt totaled $151.9 million.
Equity of $1.2 billion inched up 0.4% from the 2022-end figure.
There was roughly $661.2 million left under EEFT’s revolving credit facilities at the fourth-quarter end.
Full-Year Update
In 2023, Euronet’s adjusted earnings per share ("EPS") advanced 15% year over year to $7.46. Total revenues of $3.7 billion improved 10% year over year, or 9% on a constant-currency basis.
Operating income of $432.6 million rose 12% year over year.
Adjusted EBITDA grew 9% year over year to $618.7 million. Revenues from the EFT Processing segment advanced 15% year over year in 2023, while the same from both epay and Money Transfer units witnessed year-over-year increases of 8%.
2024 Bottom-Line View Reaffirmed
Management continues to expect adjusted EPS to record 10-15% year-over-year growth in 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Euronet Worldwide has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.
Performance of an Industry Player
Euronet Worldwide is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, American Express (AXP - Free Report) , a stock from the same industry, has gained 5.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
American Express reported revenues of $15.8 billion in the last reported quarter, representing a year-over-year change of +11.5%. EPS of $2.62 for the same period compares with $2.07 a year ago.
For the current quarter, American Express is expected to post earnings of $2.99 per share, indicating a change of +24.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
American Express has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Euronet Worldwide (EEFT) Up 11% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have added about 11% 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 drivers.
Euronet Q4 Earnings Beat on International Transactions
Euronet reported fourth-quarter 2023 adjusted earnings of $1.88 per share, which beat the Zacks Consensus Estimate by 7.4%. The bottom line climbed 35% year over year.
Total revenues advanced 11% year over year, or 7% on a constant-currency basis, to $957.7 million in the quarter under review. The top line outpaced the consensus mark by 2.2%.
The quarterly results received an impetus from the continued rebound in international transactions, wage gains and a prolonged travel season in Europe. The Money Transfer business benefited from growth in retail and digital transactions, and prudent cost management efforts. However, the upside was partly offset by an elevated expense level.
Q4 Update
EEFT’s net income was $1.43 per share, which improved 9.2% year over year in the fourth quarter. Operating income of $97.4 million rose 23% year over year, or 22% on a constant-currency basis.
Total operating expenses increased 9.4% year over year to $860.3 million in the quarter under review due to higher direct operating costs, salaries and benefits and selling, general and administrative expenses.
Adjusted EBITDA advanced 16% year over year, or 14% on a constant-currency basis, to $147.6 million.
Segmental Performances
The EFT Processing segment’s revenues of $237.9 million improved 13% year over year, or 9% on a constant-currency basis, in the fourth quarter. The figure surpassed the Zacks Consensus Estimate of $223 million.
Adjusted EBITDA rose 20% year over year, or 21% on a constant-currency basis, to $52.2 million.
Operating income was $25.5 million in the segment, which climbed 34% year over year, or 40% on a constant-currency basis, in the quarter under review. Also, the unit’s total transactions increased 30% year over year to 2,369 million, higher than the consensus mark of 2,186 million.
The segmental results benefited on the back of an increase in transactions across most of its markets and an expanding merchant acquiring business.
The epay segment recorded revenues of $316.7 million, which improved 11% year over year, or 7% on a constant-currency basis, in the fourth quarter. The figure beat the Zacks Consensus Estimate of $298 million.
Adjusted EBITDA rose 7% year over year, or 3% on a constant-currency basis, to $45.4 million in the quarter under review.
Operating income amounted to $43.6 million, which grew 6% year over year, or 3% on a constant-currency basis. The figure was higher than the consensus mark of $34.8 million. However, transactions fell 4% year over year to 906 million and also fell short of the consensus mark of 1,063 million. The metric was hurt by a decline in low-value transactions across India.
Results in the unit were aided by an increase in digital media and mobile sales. Yet, the upside was partly offset by a decline in promotional activity in the fourth quarter of 2023 compared with the year-ago quarter.
The Money Transfer segment’s revenues were $405.1 million, which improved 9% year over year, or 7% on a constant-currency basis. However, the figure missed the Zacks Consensus Estimate of $418 million.
Adjusted EBITDA of $59.3 million advanced 23% year over year, or 20% on a constant-currency basis, in the fourth quarter.
Operating income climbed 30% year over year, or 27% on a constant-currency basis, to $51.9 million. Yet, the figure lagged the consensus mark of $64 million. Total transactions grew 8% year over year to 42.4 million in the quarter under review but came lower than the consensus mark of 45 million.
Growth in U.S.-outbound transactions and international-originated money transfers contributed to the segment’s quarterly results. The money transfers originated in the Middle East and Asia, and Europe witnessed year-over-year increases of 20% and 8%, respectively. However, the upside was partly offset by lower intra-U.S. business transactions.
Corporate and Other expenses of $23.6 million escalated 12.4% year over year due to an increase in long and short-term compensation costs.
Financial Update (as of Dec 31, 2023)
Euronet exited the fourth quarter with cash and cash equivalents of $1.3 billion, which rose 10.9% from the 2022-end level. Total assets of $5.9 billion grew 9.1% from the figure at 2022 end.
Debt obligations, net of the current portion, were $1.7 billion, up 6.6% from the figure as of Dec 31, 2022. Short-term debt totaled $151.9 million.
Equity of $1.2 billion inched up 0.4% from the 2022-end figure.
There was roughly $661.2 million left under EEFT’s revolving credit facilities at the fourth-quarter end.
Full-Year Update
In 2023, Euronet’s adjusted earnings per share ("EPS") advanced 15% year over year to $7.46. Total revenues of $3.7 billion improved 10% year over year, or 9% on a constant-currency basis.
Operating income of $432.6 million rose 12% year over year.
Adjusted EBITDA grew 9% year over year to $618.7 million. Revenues from the EFT Processing segment advanced 15% year over year in 2023, while the same from both epay and Money Transfer units witnessed year-over-year increases of 8%.
2024 Bottom-Line View Reaffirmed
Management continues to expect adjusted EPS to record 10-15% year-over-year growth in 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Euronet Worldwide has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.
Performance of an Industry Player
Euronet Worldwide is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, American Express (AXP - Free Report) , a stock from the same industry, has gained 5.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
American Express reported revenues of $15.8 billion in the last reported quarter, representing a year-over-year change of +11.5%. EPS of $2.62 for the same period compares with $2.07 a year ago.
For the current quarter, American Express is expected to post earnings of $2.99 per share, indicating a change of +24.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
American Express has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.