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Why Is Euronet Worldwide (EEFT) Up 6.5% Since Last Earnings Report?
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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 6.5% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Euronet's Q1 Earnings Beat on Money Transfer Unit
Euronet reported first-quarter adjusted earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate by 28%. The bottom line soared 47% year over year.
Total revenues were $857 million, which improved 9% year over year and on a constant-currency basis. The top line beat the consensus mark by 2.3%.
The quarterly results received an impetus from strong revenue contributions from the EFT Processing, epay and Money Transfer segments. Solid growth in cross-border transactions and sustained demand for digital products aided performance. However, the upside was partly offset by a higher level of operating costs.
Q1 Update
EEFT’s net income climbed 32.3% year over year to $26.2 million. Operating income of $64 million advanced 40% year over year, or 45% on a constant-currency basis.
Total operating expenses escalated 6.9% year over year to $793 million due to an increase in direct operating costs, and salaries and benefits.
Adjusted EBITDA rose 17% year over year, or 19% on a constant-currency basis, to $108.8 million.
Segmental Performances
The EFT Processing segment recorded revenues of $217.2 million in the first quarter, which grew 13% year over year, or 12% on a constant-currency basis. The metric outpaced the Zacks Consensus Estimate of $202 million.
Adjusted EBITDA soared 51% year over year, or 54% on a constant-currency basis, to $44.7 million.
Operating income of $21.5 million increased more than three-fold year over year and on a constant-currency basis. Total transactions of the unit climbed 36% year over year to 2,502 million on the back of improved high-volume low-value transactions across India.
The segment’s results were aided by a growing merchant acquiring business and venturing into new markets.
The epay segment’s revenues advanced 8% year over year and on a constant-currency basis to $257.1 million, higher than the consensus mark of $255 million.
Adjusted EBITDA of $28.3 million decreased 3% year over year, or 2% on a constant-currency basis, in the first quarter.
Operating income slid 3% year over year and on a constant-currency basis to $26.6 million. Transactions in the unit were 953 million, down 2% year over year.
Expanding digital media and mobile sales contributed to the segment’s strength, partly offset by an elevated expense level resulting from inflationary challenges and growth-related business investments.
The Money Transfer segment generated revenues of $384.6 million, which advanced 7% year over year and on a constant-currency basis. The metric beat the Zacks Consensus Estimate of $382 million.
Adjusted EBITDA rose 8% year over year, or 10% on a constant-currency basis, to $44.5 million.
Operating income of $37.2 million improved 14% year over year, or 17% on a constant-currency basis. Total transactions grew 8% year over year to 40.6 million, attributable to strength in cross-border transactions and direct-to-consumer digital transactions. However, the upside was partly offset by a decline in intra-U.S. transactions.
In addition to sustained strong demand for digital products, prudent cost management efforts also contributed to the segment’s quarterly performance.
Corporate and Other expenses dipped 0.5% year over year to $21.3 million.
Financial Update (as of Mar 31, 2024)
Euronet exited the first quarter with cash and cash equivalents of $1.2 billion, which fell 1.4% from the 2023-end figure. Total assets of $5.7 billion tumbled 3.4% from the level in 2023 end.
Debt obligations, net of the current portion, amounted to $1.3 billion, which dropped 26.6% from the figure as of Dec 31, 2023. Short-term debt was $676.8 million.
Equity of $1.2 billion dipped 0.5% from the 2023-end figure.
There was roughly $579 million left under EEFT’s revolving credit facilities at the first-quarter end.
2024 Bottom-Line View Reaffirmed
Management continues to expect adjusted earnings per share (EPS) to record 10-15% year-over-year growth in 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Euronet Worldwide has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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 B. 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 this revision indicates a downward shift. Notably, Euronet Worldwide has a Zacks Rank #2 (Buy). We expect an above average 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, Virtu Financial (VIRT - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
Virtu Financial reported revenues of $366.87 million in the last reported quarter, representing a year-over-year change of -1.7%. EPS of $0.76 for the same period compares with $0.74 a year ago.
For the current quarter, Virtu Financial is expected to post earnings of $0.58 per share, indicating a change of +56.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Virtu Financial. Also, the stock has a VGM Score of F.
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Why Is Euronet Worldwide (EEFT) Up 6.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Euronet Worldwide (EEFT - Free Report) . Shares have added about 6.5% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Euronet's Q1 Earnings Beat on Money Transfer Unit
Euronet reported first-quarter adjusted earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate by 28%. The bottom line soared 47% year over year.
Total revenues were $857 million, which improved 9% year over year and on a constant-currency basis. The top line beat the consensus mark by 2.3%.
The quarterly results received an impetus from strong revenue contributions from the EFT Processing, epay and Money Transfer segments. Solid growth in cross-border transactions and sustained demand for digital products aided performance. However, the upside was partly offset by a higher level of operating costs.
Q1 Update
EEFT’s net income climbed 32.3% year over year to $26.2 million. Operating income of $64 million advanced 40% year over year, or 45% on a constant-currency basis.
Total operating expenses escalated 6.9% year over year to $793 million due to an increase in direct operating costs, and salaries and benefits.
Adjusted EBITDA rose 17% year over year, or 19% on a constant-currency basis, to $108.8 million.
Segmental Performances
The EFT Processing segment recorded revenues of $217.2 million in the first quarter, which grew 13% year over year, or 12% on a constant-currency basis. The metric outpaced the Zacks Consensus Estimate of $202 million.
Adjusted EBITDA soared 51% year over year, or 54% on a constant-currency basis, to $44.7 million.
Operating income of $21.5 million increased more than three-fold year over year and on a constant-currency basis. Total transactions of the unit climbed 36% year over year to 2,502 million on the back of improved high-volume low-value transactions across India.
The segment’s results were aided by a growing merchant acquiring business and venturing into new markets.
The epay segment’s revenues advanced 8% year over year and on a constant-currency basis to $257.1 million, higher than the consensus mark of $255 million.
Adjusted EBITDA of $28.3 million decreased 3% year over year, or 2% on a constant-currency basis, in the first quarter.
Operating income slid 3% year over year and on a constant-currency basis to $26.6 million. Transactions in the unit were 953 million, down 2% year over year.
Expanding digital media and mobile sales contributed to the segment’s strength, partly offset by an elevated expense level resulting from inflationary challenges and growth-related business investments.
The Money Transfer segment generated revenues of $384.6 million, which advanced 7% year over year and on a constant-currency basis. The metric beat the Zacks Consensus Estimate of $382 million.
Adjusted EBITDA rose 8% year over year, or 10% on a constant-currency basis, to $44.5 million.
Operating income of $37.2 million improved 14% year over year, or 17% on a constant-currency basis. Total transactions grew 8% year over year to 40.6 million, attributable to strength in cross-border transactions and direct-to-consumer digital transactions. However, the upside was partly offset by a decline in intra-U.S. transactions.
In addition to sustained strong demand for digital products, prudent cost management efforts also contributed to the segment’s quarterly performance.
Corporate and Other expenses dipped 0.5% year over year to $21.3 million.
Financial Update (as of Mar 31, 2024)
Euronet exited the first quarter with cash and cash equivalents of $1.2 billion, which fell 1.4% from the 2023-end figure. Total assets of $5.7 billion tumbled 3.4% from the level in 2023 end.
Debt obligations, net of the current portion, amounted to $1.3 billion, which dropped 26.6% from the figure as of Dec 31, 2023. Short-term debt was $676.8 million.
Equity of $1.2 billion dipped 0.5% from the 2023-end figure.
There was roughly $579 million left under EEFT’s revolving credit facilities at the first-quarter end.
2024 Bottom-Line View Reaffirmed
Management continues to expect adjusted earnings per share (EPS) to record 10-15% year-over-year growth in 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Euronet Worldwide has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, 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 B. 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 this revision indicates a downward shift. Notably, Euronet Worldwide has a Zacks Rank #2 (Buy). We expect an above average 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, Virtu Financial (VIRT - Free Report) , a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
Virtu Financial reported revenues of $366.87 million in the last reported quarter, representing a year-over-year change of -1.7%. EPS of $0.76 for the same period compares with $0.74 a year ago.
For the current quarter, Virtu Financial is expected to post earnings of $0.58 per share, indicating a change of +56.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Virtu Financial. Also, the stock has a VGM Score of F.