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Here's Why You Should Hold Euronet (EEFT) in Your Portfolio
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Euronet Worldwide, Inc. (EEFT - Free Report) is well-poised for growth on the back of its strategic expansions and rising digital transactions.
Over the past 60 days, the stock has witnessed its earnings estimates for 2020 and 2021 being revised 26.3% and 12.4% upward, respectively, reflecting analysts' optimism on the stock.
The company reported second-quarter 2020 earnings of 4 cents per share. The Zacks Consensus Estimate was of a loss of 33 cents. This outperformance was led by a solid contribution from its epay Segment.
The company’s top-line improvement has also been impressive, witnessing a CAGR of 11.6% during the 2015-2019 period on solid segmental results and its diversity across products and geographies. Although the metric declined in the first six months of 2020, we are hopeful that the top line will bounce back owing to a slew of product and service launches.
In the second quarter, digital transactions of the company soared 98%. By foraying into untapped markets, the digital business skyrocketed 145% in July. Euronet took a few initiatives, such as extending its digital media content in Australia that includes Uber, Netflix and Spotify. It also escalated its digital marketing spend by almost 100% in the second quarter.
The company’s strong inorganic growth strategy works in its favor. Several initiatives, such as the ATM network participation agreements and the launch of card-issuing products poise the company well for growth. The company recently unveiled money transfer services with the Austria Post alongside a cash pick-up service at more than 3,000 locations with PostFinance in Ukraine. It also reassigned agreements with the Indonesian Post for 4,000 locations among others. In the second quarter, Euronet inked a deal with Millennium Bank in Poland, Standard Chartered Bank in Pakistan and Ohridska Bank in North Macedonia to name a few.
It has been gaining on the back of its solid segments as well. EFT Segment has been witnessing sturdy growth, driven by the company’s steady focus on deploying more devices across the extended markets and its ability to develop an advanced technology for new products on both ATMs and POS terminals for optimizing and enriching the customer experience. Per management, the run rate of these expenses should continue to benefit the third and the fourth quarter. The company expects a significant recovery in 2021 for the EFT segment as travel resumes.
Money Transfer Segment is consistently delivering favorable growth for the physical and digital distribution channels, acquisitions, As of Jun 30, the Money Transfer network reached around 435,000, up 13% year over year. In the second quarter, the company unveiled Money Transfer services at more than 19,000 OXXO locations, representing a leading convenience store chain in Mexico, and launched a service to enable deposits in the bank accounts through Alipay wallets. It expanded its mobile app and online capabilities to reach 21 countries. Ria Money is also poised well for growth, courtesy of its strategic initiatives.
The company’s epay Segment has also been performing well for the last many quarters. As of Jun 30, the segment operated through a network of around 703,000 POS terminals providing electronic processing of digital media and prepaid mobile airtime top-up services in Europe, the Middle East, the Asia Pacific, the United States and South America. In epay, some of the most significant product distribution expansions were enabled by mobile wallets.
Euronet took several initiatives to cut down on expenses. It achieved around $35 million worth cost savings in the second quarter along with additional quarterly savings of approximately $15 million. This, in turn, is expected to boost margins going forward.
Other companies in the same space, such as Jefferies Financial Group Inc. (JEF - Free Report) , WEX Inc. (WEX - Free Report) and Synchrony Financial (SYF - Free Report) have rallied 34%, 19.2% and 40.2% in the same time frame.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Here's Why You Should Hold Euronet (EEFT) in Your Portfolio
Euronet Worldwide, Inc. (EEFT - Free Report) is well-poised for growth on the back of its strategic expansions and rising digital transactions.
Over the past 60 days, the stock has witnessed its earnings estimates for 2020 and 2021 being revised 26.3% and 12.4% upward, respectively, reflecting analysts' optimism on the stock.
The company reported second-quarter 2020 earnings of 4 cents per share. The Zacks Consensus Estimate was of a loss of 33 cents. This outperformance was led by a solid contribution from its epay Segment.
The company’s top-line improvement has also been impressive, witnessing a CAGR of 11.6% during the 2015-2019 period on solid segmental results and its diversity across products and geographies. Although the metric declined in the first six months of 2020, we are hopeful that the top line will bounce back owing to a slew of product and service launches.
In the second quarter, digital transactions of the company soared 98%. By foraying into untapped markets, the digital business skyrocketed 145% in July. Euronet took a few initiatives, such as extending its digital media content in Australia that includes Uber, Netflix and Spotify. It also escalated its digital marketing spend by almost 100% in the second quarter.
The company’s strong inorganic growth strategy works in its favor. Several initiatives, such as the ATM network participation agreements and the launch of card-issuing products poise the company well for growth. The company recently unveiled money transfer services with the Austria Post alongside a cash pick-up service at more than 3,000 locations with PostFinance in Ukraine. It also reassigned agreements with the Indonesian Post for 4,000 locations among others. In the second quarter, Euronet inked a deal with Millennium Bank in Poland, Standard Chartered Bank in Pakistan and Ohridska Bank in North Macedonia to name a few.
It has been gaining on the back of its solid segments as well. EFT Segment has been witnessing sturdy growth, driven by the company’s steady focus on deploying more devices across the extended markets and its ability to develop an advanced technology for new products on both ATMs and POS terminals for optimizing and enriching the customer experience. Per management, the run rate of these expenses should continue to benefit the third and the fourth quarter. The company expects a significant recovery in 2021 for the EFT segment as travel resumes.
Money Transfer Segment is consistently delivering favorable growth for the physical and digital distribution channels, acquisitions, As of Jun 30, the Money Transfer network reached around 435,000, up 13% year over year. In the second quarter, the company unveiled Money Transfer services at more than 19,000 OXXO locations, representing a leading convenience store chain in Mexico, and launched a service to enable deposits in the bank accounts through Alipay wallets. It expanded its mobile app and online capabilities to reach 21 countries. Ria Money is also poised well for growth, courtesy of its strategic initiatives.
The company’s epay Segment has also been performing well for the last many quarters. As of Jun 30, the segment operated through a network of around 703,000 POS terminals providing electronic processing of digital media and prepaid mobile airtime top-up services in Europe, the Middle East, the Asia Pacific, the United States and South America. In epay, some of the most significant product distribution expansions were enabled by mobile wallets.
Euronet took several initiatives to cut down on expenses. It achieved around $35 million worth cost savings in the second quarter along with additional quarterly savings of approximately $15 million. This, in turn, is expected to boost margins going forward.
Shares of this presently Zacks Rank #3 (Hold) have gained 12.6% in three months’ time, underperforming its industry’s growth of 16.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other companies in the same space, such as Jefferies Financial Group Inc. (JEF - Free Report) , WEX Inc. (WEX - Free Report) and Synchrony Financial (SYF - Free Report) have rallied 34%, 19.2% and 40.2% in the same time frame.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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