Euronet Worldwide's Impressive Growth: Opportunities Ahead
Euronet Worldwide's Growth Story
Shares of Euronet Worldwide, Inc. EEFT have notably climbed 23.6% over the past year, surpassing the industry's overall growth of 21.6%. The company boasts a robust market capitalization of $4.8 billion, with an average of 0.4 million shares traded daily over the last three months.
Euronet's remarkable performance stems from several key factors, including the expansion of its EFT Processing and Money Transfer segments. Enhancements to its ATM network, along with strategic acquisitions and partnerships, are also integral to its journey, all supported by a strong financial foundation.
Currently showcasing a solid performance history, Euronet's earnings estimates indicate success, having surpassed expectations in three out of the four recent quarters. The company holds a reputation for maintaining a conservative average earnings surprise of 9.04%.
The return on equity over the past twelve months stands at an impressive 31.7%, significantly above the industry's average of 20.9%. This indicates effective management and utilization of shareholder equity.
Future Projections for Euronet Stock
The consensus estimate for Euronet's earnings in 2024 is projected at $8.64 per share, marking a notable increase of 15.8% compared to the 2023 figures. Additionally, the expected revenue for 2024 is around $3.9 billion, reflecting a healthy growth of 6.2% from the previous year.
Looking further ahead, the 2025 earnings forecast stands at $9.70 per share, translating to a 12.3% improvement from the 2024 estimate. Revenue expectations for 2025 are pegged at $4.2 billion, which would represent an encouraging 8.1% increase.
Retention of Growth Momentum
Euronet's revenue streams maintain robust growth, fueled chiefly by thriving EFT Processing and Money Transfer segments. Preliminary results for the first half of 2024 indicate a year-over-year revenue increase of 6.8%.
The company’s EFT Processing sector benefits from a rise in active ATMs and a resurgence in cross-border transaction volumes, complemented by continuous expansion into new markets. The Money Transfer segment has also thrived thanks to a surge in U.S.-outbound transactions and digital transactions.
To expand its footprint, Euronet is actively growing its independent ATM network across various global markets. Notably, in mid-2024, it acquired ATM terminals in Malaysia to strengthen its position in the non-bank sector there.
Apart from organic growth, strategic acquisitions remain a cornerstone of Euronet's approach. A recent multi-year agreement with Onnipro, a prominent payment processing solutions provider in Brazil, aims to bolster Euronet's capabilities. Collaborations with SOFTONE Group also focus on enhancing merchant-acquiring solutions in critical European markets.
The ongoing digital transformation is creating vast opportunities in the payments sector, particularly in contactless transactions, which Euronet is poised to leverage effectively. As of June 30, 2024, the company reported substantial cash reserves of $1.3 billion, up 1.4% compared to the previous year. Euronet also holds a strong VGM Score of B, suggesting it ranks favorably among peers with regard to value, growth, and momentum.
Alternative Stock Picks
Investors might also consider other promising stocks within the finance sector. Notable mentions include Commerce Bancshares, Inc. CBSH, Amalgamated Financial Corp. AMAL, and Esquire Financial Holdings, Inc. ESQ. With a strong ranking of #1 (Strong Buy), Commerce Bancshares has consistently surpassed earnings estimates, achieving an average surprise of 8.02%.
Amalgamated Financial and Esquire Financial also display potential, with strong performances marked by their earnings estimates heading toward significant improvements of 11.9% and 12.5%, respectively.
Overall, shares of these companies have performed well, with Commerce Bancshares and Esquire Financial achieving gains of 34% and 26.7% over the last year, while Amalgamated Financial saw an impressive 79.9% increase.
Frequently Asked Questions
What factors have driven Euronet's stock growth?
Euronet's stock growth can be attributed to the expansion of its EFT Processing and Money Transfer segments, strategic acquisitions, and a robust ATM network.
What is the earnings forecast for Euronet in 2024?
The earnings forecast for Euronet in 2024 is projected at $8.64 per share, indicating a potential increase of 15.8% from 2023.
How does Euronet's return on equity compare to its industry?
Euronet's return on equity is currently at 31.7%, surpassing the industry average of 20.9%, showcasing its operational efficiency.
What acquisitions has Euronet made recently?
Recently, Euronet acquired Malaysian ATM terminals to strengthen its position in the Malaysian market, enhancing its non-bank ATM sector presence.
Which other stocks might investors consider?
Investors may also look into stocks like Commerce Bancshares, Amalgamated Financial, and Esquire Financial due to their strong performances and favorable rankings.
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