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Euronet Worldwide Q3 Earnings: Can NasdaqGS:EEFT Hit Its $0.53 EPS Target?

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Euronet Worldwide, Inc. (NasdaqGS:EEFT) is scheduled to report Q3 earnings results before markets open for trading on October 28, 2020.

The company is expected to report earnings of $0.53/share on revenue of $619.8 million. The consensus earnings per share (EPS) of $0.53/share is based on a poll of 10 analysts and represents a decline in eps of −81.3% over the same quarter last year, when the company reported earnings of $2.84/share.

The revenue forecast of $619.8 million based on a poll of 9 analysts implies a year-over-year (YoY) decline in revenue of −21.2%. Last year the company reported $787 million in revenue for the quarter.

Expected to report EPS contraction of −81.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $619.83 $787.00 −21.2%
EPS $0.53 $2.84 −81.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Euronet Worldwide, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.37 $0.04 110.8% Beat
Q1, 2020 $0.70 $0.55 −21.3% Missed
Q4, 2019 $1.61 $1.63 1.4% Beat
Q3, 2019 $2.80 $2.84 1.3% Beat
Q2, 2019 $1.70 $1.69 −0.3% Missed
Q1, 2019 $0.83 $0.85 2.0% Beat
Q4, 2018 $1.27 $1.37 7.7% Beat
Q3, 2018 $2.10 $2.16 2.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $96.60 $97.64 1.1% Increase
April 29, 2020 $89.82 $91.76 2.2% Increase
February 11, 2020 $157.93 $147.75 −6.4% Decline
October 23, 2019 $143.96 $143.11 −0.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.89, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.89 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Euronet Worldwide, Inc. is currently trading at $91.60/share, down −3.4% for the day. The company is trading at approximately 54.6% of its 52-week high of $167.64/share. The company’s stock price is down −6.2% since the last earnings report and down −3.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 46.83 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:EEFT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 36.80 and a forward P/E multiple of 51.97.

Euronet Worldwide, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.95. The following table summarizes some other key fundamental ratios:

Data as of October 26, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $91.60
P/E Ratio 36.8x
P/E Ratio (Fwd) 52.0x
PEG Ratio −0.8
Total Debt / Total Capital 20.3%
Levered Free Cash Flow $517.3 million
EV / EBITDA 10.5x

Finbox

Euronet Worldwide, Inc. is a mid-cap stock with a market capitalization of $4.79 billion and a total enterprise value of $4.776 billion. The company operates in the Information Technology sector and the IT Services industry.

Euronet Worldwide, Inc. provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers, and individual consumers worldwide. The company’s Electronic Fund Transfer (EFT) Processing segment provides electronic payment solutions, including automated teller machine (ATM) cash withdrawal and deposit services, ATM network participation, outsourced ATM and point-of-sale (POS) management solutions, credit and debit card outsourcing, card issuing, and merchant acquiring services. This segment also offers ATM and POS currency conversion, surcharge, advertising, customer relationship management, mobile top-up, bill payment, fraud management, foreign remittance and cardless payout, banknote recycling solutions, and tax-refund services; and integrated electronic financial transaction software solutions. As of December 31, 2019, it operated a network of 46,070 ATMs; and approximately 330,000 POS terminals. Its epay segment provides distribution and processing of prepaid mobile airtime and other electronic content and payment processing services for various prepaid products, cards, and services; and vouchers and physical gift fulfillment, and gift card distribution and processing services. This segment operated a network of approximately 728,000 POS terminals. The company’s Money Transfer segment offers consumer-to-consumer money transfer services primarily under the Ria, AFEX, and IME brands; account-to-account money transfer services under the xe brand; customers bill payment services; payment alternatives, such as money orders; check cashing services; foreign currency exchange and mobile top-up services; and cash management and foreign currency risk management services. The company was formerly known as Euronet Services, Inc. and changed its name to Euronet Worldwide, Inc. in August 2001. Euronet Worldwide, Inc. was founded in 1994 and is headquartered in Leawood, Kansas.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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