It has been about a month since the last earnings report for Euronet Worldwide (EEFT Quick QuoteEEFT - Free Report) . Shares have added about 6% 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’s Q1 Earnings Miss Estimates, Tumble Y/Y

Euronet reported first-quarter 2020 earnings of 55 cents per share, missing the Zacks Consensus Estimate by 26.7%. Also, the bottom line fell 35.3% year over year due to the coronavirus outbreak affecting its business.

The company witnessed transaction declines in the first quarter due to the COVID-19 pandemic along with lower operating income.

The company’s net income plunged 93.5% to 4 cents per share in the quarter under review.

Total revenues were $583.9 million, up 1% from the year-ago quarter.
However, the top line missed the Zacks Consensus Estimate by 1.7%.
Operating income fell nearly 44% to $31.6 million in the first quarter.

Total operating expenses of $552.3 million were up 5.9% year over year.

Segmental Results

EFT Processing Segment’s total revenues inched up 0.1% (3% in constant currency) year over year on the back of higher transactions. Adjusted EBITDA of $25.2 million dropped 25% (down 23% at cc) from the year-ago period. Operating income of $4.9 million slumped 71% year over year (down 71% on constant currency basis) due to fewer European ATM transactions.

The epay Segment’s total revenues slipped 2% year over year to $172.9 million (1% up on constant currency basis). Adjusted EBITDA amounted to $18.3 million, decreasing 8% from the year-earlier figure (down 5% on constant currency basis). Operating income of $16.5 million deteriorated 8% year over year (down 6% on constant currency basis) due to SG&A investments made throughout 2019. Reported transactions were 447 million, up 32% year over year. This segmental growth was driven by improved numbers across Europe and very solid contributions from India.

The Money Transfer Segment’s total revenues climbed 4% (5% at cc) year over year to $266.3 million, backed by 3% higher transactions. Adjusted EBITDA amounted to $30.9 million, reflecting a 20% decline (18% decrease at cc) from the prior-year quarter. Operating income totaled $22.3 million, down 25% in constant currency. This segment reported total transactions of 27.4 million, up 3% year over year.

Corporate and Other Segment reported an expense of $12.1 million for the quarter, up 28.7% year over year.

Financial Update

Total assets at first-quarter end were $4.2 billion, down 10.2% from the level at 2019 end.

Cash and cash equivalents plunged 9.62% to $709.5 million from the figure at 2019 end.

Debt obligations, net of current portion, dipped 0.7% year over year to $1.08 billion from the level at 2019 end.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -142.48% due to these changes.

VGM Scores

At this time, Euronet Worldwide has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Euronet Worldwide has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.