Tuesday, Euronet Worldwide (NASDAQ:EEFT) received a reaffirmed Buy rating and a $136.00 price target from DA Davidson. The firm's optimism is based on the expectation of a substantial contribution from promotional programs in the company's Prepaid (epay) segment in the fourth quarter. Euronet is anticipated to announce its third-quarter results later in October.
The analyst from DA Davidson adjusted their quarterly forecasts for Euronet, citing promotional activities as the key factor for the revision. These promotions within the epay segment are expected to bolster the company's performance as it heads into the final quarter of the year.
The current forecast is for 10-15% year-over-year growth, which translates to an adjusted EPS range of $8.21 to $8.58.
The analyst's commentary suggests that there is a possibility for Euronet's management to either confirm their previous growth objectives or potentially raise the midpoint of their EPS growth forecast for the next year.
Euronet's stock continues to hold the Buy rating from DA Davidson, with the firm maintaining confidence in the company's growth trajectory and the $136.00 price target, suggesting a positive outlook for the stock's future performance.
In other recent news, Euronet Worldwide has been reporting record-breaking financial performance. The company's second quarter of 2024 saw revenues of $986 million, an adjusted operating income of $134 million, adjusted EBITDA of $178 million, and an adjusted EPS of $2.25. These results were driven by double-digit growth in the EFT segment, steady growth in the epay and money transfer segments, and the repurchase of $114 million worth of shares.
Euronet's Q2 performance also included the acquisition of the MEPS ATM network from Payments Network Malaysia Sdn Bhd (PayNet), expanding its role as the largest non-bank ATM operator in Malaysia. The company also welcomed Sergi Herrero, an experienced executive in the payment and technology sectors, to its board.
In terms of analyst coverage, Citi maintained its Buy rating on Euronet Worldwide with a steady price target of $135.00. This was followed by DA Davidson increasing its price target from $126 to $136, reiterating a Buy rating. Wolfe Research upgraded Euronet's stock rating from Underperform to Peer Perform, acknowledging the company's strategic diversification efforts.
InvestingPro Insights
To complement the analyst's positive outlook on Euronet Worldwide (NASDAQ:EEFT), InvestingPro data provides additional context for investors. The company's market cap stands at $4.31 billion, with a P/E ratio of 15.73, indicating a relatively moderate valuation compared to its earnings. This aligns with the analyst's Buy rating and suggests potential upside, especially considering the InvestingPro fair value of $140.24, which is higher than DA Davidson's $136 price target.
InvestingPro Tips highlight that management has been aggressively buying back shares, which could be seen as a sign of confidence in the company's future prospects and may support the stock price. Additionally, Euronet has been profitable over the last twelve months, with a revenue of $3.8 billion and a healthy gross profit margin of 39.88%.
While the company's revenue growth of 7.99% over the last twelve months is solid, it's worth noting that Euronet is trading at a high P/E ratio relative to its near-term earnings growth. This information, along with 21 additional tips available on InvestingPro, can help investors make more informed decisions about EEFT stock.
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