Euronet Worldwide’s stock price has taken a beating over the past six months, shedding 27.7% of its value and falling to $76.62 per share. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Given the weaker price action, is now the time to buy EEFT? Find out in our full research report, it’s free for active Edge members.
Why Are We Positive On EEFT?
Operating a global network of over 47,000 ATMs and 821,000 point-of-sale terminals across more than 60 countries, Euronet Worldwide (NASDAQ:EEFT) provides electronic payment solutions including ATM services, prepaid product processing, and international money transfer services.
1. Long-Term Revenue Growth Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
Over the last five years, Euronet Worldwide grew its revenue at a solid 11.1% compounded annual growth rate. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Euronet Worldwide’s EPS grew at a spectacular 23% compounded annual growth rate over the last five years, higher than its 11.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.
Over the last five years, Euronet Worldwide has averaged an ROE of 19.5%, excellent for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Euronet Worldwide has a strong competitive moat.
Final Judgment
These are just a few reasons why we think Euronet Worldwide is a great business. After the recent drawdown, the stock trades at 6.9× forward P/E (or $76.62 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
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