EVERTEC (EVTC)

Payment processing company EVERTEC (NYSE:EVTC) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 7.9% year on year to $228.6 million. The company’s full-year revenue guidance of $924 million at the midpoint came in 2.1% above analysts’ estimates. Its non-GAAP profit of $0.92 per share was 3.5% above analysts’ consensus estimates.

Company Overview

Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE:EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.

Payment processors facilitate transactions between merchants, consumers, and financial institutions. Growth comes from e-commerce expansion, declining cash usage globally, and value-added services beyond basic processing. Headwinds include margin pressure from merchant negotiating power, rapid technological change requiring investment, and emerging competition from technology companies entering the payments ecosystem.

EVERTEC competes with global payment processors like Fidelity National Information Services (NYSE: FIS), Fiserv (NASDAQ: FISV), and Global Payments (NYSE: GPN), as well as digital payment providers such as PayPal (NASDAQ: PYPL) and Block (NYSE: SQ). In Latin America, the company also faces competition from regional players like dLocal (NASDAQ: DLO) and Rappi.

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, EVERTEC grew its revenue at a solid 12.4% compounded annual growth rate. Its growth surpassed the average financials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. EVERTEC’s annualized revenue growth of 16.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, EVERTEC reported year-on-year revenue growth of 7.9%, and its $228.6 million of revenue exceeded Wall Street’s estimates by 2%.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Payment Processing companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

Financials companies manage interest-bearing assets and liabilities, making the interest income and expenses included in pre-tax profit essential to their profit calculation. Taxes, being external factors beyond management control, are appropriately excluded from this alternative margin measure.

Over the last four years, EVERTEC’s pre-tax profit margin has risen by 12.4 percentage points, going from 29.9% to 17.5%. Luckily, it seems the company has recently taken steps to address its expense base as its pre-tax profit margin expanded by 1.3 percentage points on a two-year basis.

EVERTEC’s pre-tax profit margin came in at 14.6% this quarter. This result was 1.9 percentage points better than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

EVERTEC’s decent 12.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For EVERTEC, its two-year annual EPS growth of 11.6% is similar to its five-year trend, implying stable earnings power.

In Q3, EVERTEC reported adjusted EPS of $0.92, up from $0.86 in the same quarter last year. This print beat analysts’ estimates by 3.5%. Over the next 12 months, Wall Street expects EVERTEC’s full-year EPS of $3.55 to stay about the same.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, EVERTEC has averaged an ROE of 31.4%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows EVERTEC has a strong competitive moat.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

EVERTEC currently has $1.09 billion of debt and $663.8 million of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 1.7×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 3.5× for a financials business.

It was great to see EVERTEC’s full-year EPS guidance top analysts’ expectations. We were also glad its full-year revenue guidance exceeded Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock remained flat at $28.10 immediately after reporting.

Updated: December 3, 2025 at 11:36 PM EST

Before making an investment decision, investors should account for EVERTEC’s business fundamentals and valuation in addition to what happened in the latest quarter.

There is a lot to like about EVERTEC. For starters, its revenue growth was solid over the last five years. And while its declining pre-tax profit margin shows the business has become less efficient, its stellar ROE suggests it has been a well-run company historically. Additionally, EVERTEC’s decent EPS growth over the last five years shows its profits are trickling down to shareholders.

EVERTEC’s P/E ratio based on the next 12 months is 8x. Looking at the financials space today, EVERTEC’s fundamentals really stand out, and we like it at this bargain price.

Wall Street analysts have a consensus one-year price target of $32.80 on the company (compared to the current share price of $30.05), implying they see 9.2% upside in buying EVERTEC in the short term.