Euronet Worldwide, Inc. (EEFT - Free Report) is an industry leader in providing secure electronic financial transactions for financial institutions. The company’s extensive ATM network includes more than 37,000 ATMs all over the world. Euronet continues to see plenty of opportunities to deploy ATMs across its existing markets as well as new markets. Over the last year, the company has grown its ATM base by 14% and still has thousands of ATMs in the pipeline.
Euronet continues to add new products to its ATM. In the second quarter, it began testing direct access fees or surcharge fees on certain international transactions, especially in certain new European markets. At the same time, it commenced the integration of INNOVA TAXFREE VAT refund services into its product line up.
Euronet is gaining from increased outsourcing of ATMs by banks to third parties, as they focus on core business. Banks are still working with outdated technology, which, in turn, provides scope for growth to the company. Euronet, via the use of its sophisticated technology, has developed its own industry-leading ATM switching platform and ATM drivers to expand its network and offer customers more convenience, products and functionality. This new switch uses industry-leading private cloud technology unmatched in the banking sector.
The company has lapped in a number of ATM agreements from various banks. It has a significant number of new prospects with 3,000 to 4,000 ATMs already in the outsourcing sales pipeline. The company has several commitments and strong interests from banks in both Europe and Asia. This should boost the company’s outsourcing volume over the next six to 18 months.
Management believes that as more banks recognize the advantages of its technology and the expansiveness of its owned ATM networks, outsourcing a network participation agreement will become a larger contributor of the company’s growth.
Moreover, the company’s ATM deals are typically five-year agreements and provide recurring revenues, with very little incremental costs. Euronet has expectations to deliver 3,500 new, high-value ATMs and other exciting opportunities in new markets, which will help the company deliver strong results in 2018 and beyond.
The company has gained 7.1% in a year’s time against the industry’s decline of 4.6%.
Zacks Rank & Other Stocks to Consider
Euronet carries a Zacks Rank #2 (Buy).
Other stocks having the same rank as Euronet are MoneyGram International Inc. (MGI - Free Report) , Oaktree Specialty Lending Corp. (OCSL - Free Report) and PJT Partners Inc. (PJT - Free Report) .
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
MoneyGram has seen the Zacks Consensus Estimate for current-year earnings being revised 11.3% upward over the last 60 days.
PJT Partners beat earnings estimate in two of the last four quarters with an average positive surprise of 10.6%.
Oaktree Specialty Lending has seen the Zacks Consensus Estimate for current-year earnings being revised 2.5% upward over the last 60 days.
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