Euronet’s 4Q Profit Beats Analysts’ Estimates; Street Says Buy

Euronet’s fourth-quarter results exceeded analysts’ expectations as the electronic payment processing company benefited from increased demand for online money transfer transactions during the coronavirus pandemic.

During the fourth quarter, Euronet’s (EEFT) revenue increased 2% year-on-year to $706.6 million, topping analysts’ expectations by $51.7 million. The company reported diluted earnings per share (EPS) of $1.11, beating the Street consensus of $0.72. Operating income plunged 53% year-on-year to $50.2 million.

During fiscal 2020, the company’s revenue dropped to $2.48 billion from $2.75 billion year-on-year. Earnings fell to $2.82 per share from $7.01 per share during the same comparative period.

Euronet’s Money Transfer and epay segments recorded revenue growth of 27% and 18% respectively year-on-year driven by the company’s growth in digital media and its digital channel expansion in Asia and South America in 4Q.

Looking ahead, Euronet forecasted for first quarter adjusted EBITDA to land between $50 million to $60 million. (See Euronet stock analysis on TipRanks)

Citigroup analyst Andrew Schmitt this month upgraded the stock to Buy from Hold and raised the price target from $122 to $161 (15.31% upside potential). Andrew sees a gradually improving visibility from tourism in 2021 and expects momentum to build in 2022.

The rest of the Street is bullish about the stock with a Strong Buy consensus rating. That’s based on 4 Buys and 1 Hold. The average analyst price target of $158.80 implies 13.7% upside from current levels.

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