Euronet Stock Rises 24% in a Year: What Lies Ahead for Investors?

Shares of Euronet Worldwide, Inc. EEFT have gained 23.6% in the past year compared with the industry’s 21.6% growth. With a market capitalization of $4.8 billion, the average volume of shares traded in the last three months was 0.4 million.

Euronet’s growth is driven by expansions in its EFT Processing and Money Transfer segments, robust ATM network enhancements, strategic acquisitions and partnerships, all underpinned by a solid financial foundation. 

The company, presently carrying a Zacks Rank #3 (Hold), has a decent record of beating estimates in three of the trailing four quarters and matching the mark once, the average earnings surprise being 9.04%. 

Return on equity in the trailing 12 months is currently 31.7%, which is higher than the industry’s average of 20.9%. This substantiates the company’s efficiency in utilizing shareholders’ funds.

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Robust Growth Prospects of EEFT Stock

The Zacks Consensus Estimate for Euronet’s 2024 earnings is pegged at $8.64 per share, which indicates a 15.8% increase from the 2023 figure. The consensus mark for revenues is $3.9 billion, implying 6.2% growth from the year-ago figure. 

The Zacks Consensus Estimate for 2025 earnings is pegged at $9.70 per share, which implies an 12.3% improvement from the 2024 estimate. The consensus mark for revenues is $4.2 billion, implying a 8.1% rise from the 2024 estimate.

Can Euronet Retain the Momentum?

Euronet’s revenues continue to see robust growth, primarily driven by its EFT Processing and Money Transfer segments. In the first half of 2024, revenues rose 6.8% year over year. 

The growth in the EFT Processing segment is supported by an increase in the average number of active ATMs, a recovery in cross-border transaction volumes and ongoing expansion into new markets. The Money Transfer segment is bolstered by an increase in U.S.-outbound transactions, direct-to-consumer digital transactions and international-originated money transfers.

Euronet consistently works to broaden its independent ATM network across various countries, aiming to process a greater number of transactions. In May 2024, it acquired Malaysian Electronic Payment System (“MEPS”) ATM terminals, aiming to strengthen its presence in the Malaysian market and reinforce its position as a leading player in the country’s non-bank ATM sector.

Euronet’s strategy includes growth through acquisitions and partnerships, which help develop new products and services, increase revenues and strengthen its geographic footprint. In June 2024, the company inked a multi-year agreement with Onnipro, a top payment processing solutions provider in Brazil. Under this deal, Onnipro will leverage Euronet’s Ren payments platform to strengthen its card-issuing capabilities. In April 2024, EEFT and SOFTONE Group, a major cloud-based business software provider in Greece and Southeast Europe, joined forces to offer integrated merchant-acquiring solutions in Greece.

Moreover, the surge in the digital economy promotes growth in contactless payments, providing Euronet with significant opportunities to capitalize on as a provider of electronic payment and transaction processing solutions in the days ahead. Its uninterrupted pursuit of growth initiatives is supported by its strong financial position. As of June 30, 2024, the company had substantial cash reserves of $1.3 billion, an increase of 1.4% from the 2023-end level. EEFT boasts an impressive VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.

Stocks to Consider

Some better-ranked stocks in the Finance space are Commerce Bancshares, Inc. CBSH, Amalgamated Financial Corp. AMAL and Esquire Financial Holdings, Inc. ESQ. Commerce Bancshares sports a Zacks Rank #1 (Strong Buy), and Amalgamated Financial and Esquire Financial currently carry a Zacks Rank #2 (Buy).

Commerce Bancshares’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.02%. The Zacks Consensus Estimate for CBSH’s 2024 earnings indicates an improvement of 8.8% while the consensus estimate for revenues implies growth of 4.3% from the corresponding year-ago reported figures. The consensus mark for CBSH’s earnings has moved 1.5% north in the past 30 days.

The bottom line of Amalgamated Financial beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 7.14%. The Zacks Consensus Estimate for AMAL’s 2024 earnings indicates an improvement of 11.9% while the consensus estimate for revenues implies growth of 7% from the corresponding year-ago reported figures. The consensus mark for AMAL’s earnings has moved 6.1% north in the past 30 days.

Esquire Financial’s earnings outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 1.72%. The Zacks Consensus Estimate for ESQ’s 2024 earnings indicates an improvement of 12.5% while the consensus estimate for revenues implies growth of 9.1% from the corresponding year-ago reported figures. The consensus mark for ESQ’s earnings has moved 3.4% north in the past 60 days.

Shares of Commerce Bancshares, Amalgamated Financial and Esquire Financial have gained 34%, 79.9% and 26.7%, respectively, in the past year.

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