Euronet Worldwide (EEFT) has reported record numbers for the first quarter of 2024, with revenue reaching $857 million and adjusted earnings per share (EPS) increasing 47% to $1.28. The company’s strong results were driven by growth across all of its segments, including EFT, epay and money transfer.
Euronet’s success in international transactions, expansion of merchant services and strategic investments in the market have led to these historic results, exceeding analyst expectations. The company maintains conservative net debt leverage of 1x EBITDA and is confident of achieving adjusted annual EPS growth of 10% to 15% for the year.
Key aspects
- Euronet Worldwide reported record profits in the first quarter of 2024, with revenue of $857 million and adjusted EPS of $1.28.
- Growth was driven by increased international transactions, expansion of business services and investments in new markets.
- The EFT segment experienced significant growth due to the increase in cash-out transactions and the expansion of the merchant services business.
- The Epay segment increased its constant currency revenue by 8% and expanded into new markets, such as Vietnam and Japan.
- The money transfer segment grew in cross-border and digital transactions, with opportunities in the $800 billion remittance market.
- Positive travel sector indicators suggest further growth potential in international travel.
- Euronet is optimistic about future profit growth, targeting 10% to 15% by 2024.
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Company Outlook
- Euronet expects continued growth in international travel, which will benefit its business segments.
- The company focuses on network growth, technology, product development, geographic expansion, strategic acquisitions and cost management.
- Euronet remains optimistic for the remainder of 2024, with profit growth forecasts of between 10% and 15%.
Bearish Highlights
- US-to-US business within the money transfer segment has declined due to increasing competition from digital payment methods.
- Walmart’s cash-to-cash business has seen a decline, although the impact is mitigated by stronger international results.
Positive aspects
- The EFT segment recorded growth in merchant services and ATM optimization.
- The epay segment is introducing higher margin epay branded products and expanding partner solutions.
- The Dandelion network of the money transfer segment is a growth engine, with access to billions of bank accounts and wallets.
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- Despite overall growth, there was a decline in business between the US and Walmart’s cash-to-cash service, due to the rise of digital payment methods.
Featured Questions and Answers
- Euronet analyzed the possible impact of changes in surcharge and interchange regulations on future profits.
- The company is in talks with US financial institutions to establish partnerships and aims to expand ATMs in tourist areas outside Europe.
- Digital transactions and payments to bank accounts or wallets are driving rising margins in the money transfer segment.
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Euronet Worldwide’s first quarter of 2024 sets a positive tone for the company’s future, with strategic moves and market trends aligning to support its growth objectives. Although there are challenges such as increased digital competition, the company’s diversified growth strategies and expansion plans indicate strong prospects for the rest of the year.
InvestingPro Insights
Euronet Worldwide (EEFT) has demonstrated a remarkable first quarter in 2024, and real-time data from InvestingPro underlines the company’s strong financial health and market position. Here are some keys based on the latest metrics:
- With a market capitalization of $4.79 billion and a P/E of 18.33, Euronet Worldwide shows a strong presence in the market. Notably, the company’s Adjusted P/E for trailing twelve months starting from Q4’23 is even more attractive at 16.84, indicating a favorable valuation relative to its earnings.
- The company’s revenue growth has been impressive, increasing 9.8% over the trailing twelve months to Q4 2023. This growth trajectory is consistent with its reported earnings and is a testament to the company’s expansion and the operational efficiency of the company.
- Euronet’s gross profit margin stands at a healthy 39.73%, reflecting the company’s ability to maintain profitability despite the competitive landscape.
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InvestingPro’s advice also highlights several strategic moves by Euronet management that are relevant to the interests of investors:
- Management’s aggressive share buyback strategy indicates confidence in the company’s future and commitment to delivering value to shareholders.
- Euronet is trading at a low P/E relative to near-term earnings growth, suggesting the stock may be undervalued and offering a potential opportunity to investors looking for growth at a reasonable price.
This data, along with the 6 additional InvestingPro tips available on the platform, can offer a deeper understanding of the financial nuances and future potential of Euronet Worldwide. Interested readers can explore these tips and more by visiting https://www.investing.com/pro/EEFT, and can use the coupon code PRONEWS24 to get an additional 10% discount on an annual or bi-annual Pro and Pro+ subscription.
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