EVO Payments (NasdaqGM:EVOP) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

EVO Payments, Inc. (NasdaqGM:EVOP) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of $0.18/share on revenue of $116.5 million. The consensus earnings per share (EPS) of $0.18/share is based on a poll of 12 analysts and represents a decline in eps of −5.5% over the same quarter last year, when the company reported earnings of $0.19/share.

The revenue forecast of $116.5 million based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −23.7%. Last year the company reported $152.6 million in revenue for the quarter.

Expected to report EPS contraction of −5.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $116.50 $152.60 −23.7%
EPS $0.18 $0.19 −5.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarter.

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.02 $0.11 369.7% Beat
Q1, 2020 $0.08 $0.11 41.2% Beat
Q4, 2019 $0.19 $0.24 25.5% Beat
Q3, 2019 $0.16 $0.19 22.0% Beat
Q2, 2019 $0.13 $0.16 19.0% Beat
Q1, 2019 $0.04 $0.08 104.2% Beat
Q4, 2018 $0.18 $0.18 0% Met
Q3, 2018 $0.14 $0.17 18.5% 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 9.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $23.91 $26.11 9.2% Increase
May 8, 2020 $20.63 $21.11 2.3% Increase
February 27, 2020 $26.79 $25.28 −5.6% Decline
November 7, 2019 $27.43 $27.97 2.0% Increase

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 −2.73, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.73 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

EVO Payments, Inc. is currently trading at $21.07/share, down −3.2% for the day. The company is trading at approximately 70.2% of its 52-week high of $30/share. The company’s stock price is down −19.3% since the last earnings report and down −13.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 28.33 suggests the company is trading in technically oversold territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGM:EVOP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −55.92 and a forward P/E multiple of 16.18.

EVO Payments, Inc.’s current share price also implies a price-to-book (P/B) multiple of −3.55. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21.07
P/E Ratio −55.9x
P/E Ratio (Fwd) 16.2x
PEG Ratio −0.8
Total Debt / Total Capital 21.4%
Levered Free Cash Flow $95.263 million
EV / EBITDA 18.3x

Finbox

EVO Payments, Inc. is a small-cap stock with a market capitalization of $873.9 million and a total enterprise value of $1.937 billion. The company operates in the Information Technology sector and the IT Services industry.

EVO Payments, Inc. operates as an integrated merchant acquirer and payment processor in the Americas and Europe. Its payment and commerce solutions consist of gateway solutions, online fraud prevention and management reporting, online hosted payments page capabilities, cellphone-based SMS integrated payment collection services, security tokenization and encryption solutions at the point-of-sale, dynamic currency conversion, loyalty offers, and other ancillary solutions. The company also offers processing capabilities for specific industries and provides merchants with recurring billing, multi-currency authorization and settlement, and cross-border processing. In addition, it provides other services that enable through technical integrations with third-party providers. It offers its services to approximately 550,000 merchants. As of December 31, 2019, the company processed approximately 1.0 billion transactions in the Americas, which includes the United States, Canada, and Mexico; and 2.5 billion transactions in Europe consisting of the Czech Republic, Germany, Ireland, Poland, Spain, and the United Kingdom, as well as supporting merchants in France, Austria, Italy, the Nordics, and other Central and Eastern European countries. The company was founded in 1989 and is headquartered in Atlanta, Georgia.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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