Back to top

Image: Bigstock

Euronet's (EEFT) Q4 Earnings to Benefit From epay Performance

Read MoreHide Full Article

Euronet Worldwide, Inc. (EEFT - Free Report) is set to report fourth-quarter 2021 earnings on Feb 10, before the opening bell.

In the last reported quarter, the leading electronics payments provider’s adjusted earnings per share of $1.77 beat the Zacks Consensus Estimate of $1.50, primarily due to prompt revival of EFT transactions, thanks to a substantial rise in volumes across low-value point-of-sale transactions in Europe, partly offset by elevated operating expenses.

Let’s see how things have shaped up prior to the fourth-quarter earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.33 has been stable in the past week. This estimate is indicative of a 19.8% increase from the year-ago reported figure of $1.11 per share. Similarly, the Zacks Consensus Estimate for revenues is pegged at $807.4 million, suggesting an increase of 14.3% from the year-ago reported figure.

Euronet beat earnings estimates twice in the trailing four quarters and missed on two occasions, delivering an average of 2.6%. This is depicted in the graph below.

Euronet Worldwide, Inc. Price and EPS Surprise

Euronet Worldwide, Inc. Price and EPS Surprise

Euronet Worldwide, Inc. price-eps-surprise | Euronet Worldwide, Inc. Quote

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Euronet this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Earnings ESP for the company is currently +0.50%. This is because the Most Accurate Estimate is pegged at $1.34 per share, higher than the Zacks Consensus Estimate of $1.33. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: Euronet currently holds a Zacks Rank #3.

Factors at Play

Euronet is expected to have gained from the rise in consumer spending level in the December quarter. Overall economic recovery is likely to have aided digital spending growth, thanks to the relaxation of COVID-related restrictions and travel bans.

As such, continued expansion of the digital distribution channel and growing transaction volumes are likely to have aided Euronet’s epay business. The Zacks Consensus Estimate for revenues from epay for the fourth quarter is pegged at $314 million, indicating an increase from $276 million in the prior-year period.

The consensus mark for EFT Processing revenues is pegged at $138 million, implying an increase from $100 million a year ago. Relaxation of travel restrictions and higher transactions are expected to have benefited the segment in the fourth quarter.

The Zacks Consensus Estimate for revenues from the Money Transfer segment is pegged at $356 million, indicating a rise from $332 million. Increased direct-to-consumer digital transactions and international-originated money transfers are likely to have contributed to the upside, positioning the company for an earnings beat and year-over-year rise.

Other Stocks That Warrant a Look

Here are some other companies from the Finance space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:

Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.48% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Arch Capital’s bottom line for the to-be-reported quarter indicates an 82.1% year-over-year rise.

Jones Lang LaSalle Incorporated (JLL - Free Report) has an Earnings ESP of +9.23% and is a Zacks #2 Ranked player. The Zacks Consensus Estimate for Jones Lang LaSalle’s earnings per share for the to-be-reported quarter indicates a 26.3% year-over-year jump.

American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +4.88% and a Zacks Rank #3. The Zacks Consensus Estimate for American International’s bottom line for the to-be-reported quarter indicates a 24.5% year-over-year increase.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in