Euronet Worldwide: Strong Performance and Growth Potential Underscore Buy Rating

Analyst Gustavo Gala from Monness reiterated a Buy rating on Euronet Worldwide (EEFT – Research Report) and keeping the price target at $140.00.

Gustavo Gala’s rating is based on a positive view of Euronet Worldwide’s recent performance and future potential. His analysis highlights the company’s strong first-quarter results, which exceeded expectations in terms of revenue, EBITDA, and EPS. The Electronic Funds Transfer (EFT) division, a key driver of Euronet’s profitability, demonstrated significant improvements. This aligns with Gala’s initial positive bias when he launched coverage on the stock. He notes that management expects continued margin growth in the EFT segment throughout the year, and he suggests that the company’s conservative guidance might provide room for further upside. Gala emphasizes Euronet’s ability to benefit from its diverse income streams and expects the company to sustain growth over time. He believes the market has not fully appreciated the potential gains from the EFT segment’s strategic adjustments, including footprint optimization and diversification of earnings streams.

Moreover, Gala points to Euronet’s ownership of strategic assets like Ren and Dandelion, which have been performing well and expanding into new markets, as strengths. The EFT division’s strategy of removing unprofitable ATMs and growing its merchant services has resulted in significant margin improvements, which are projected to continue. He also notes the potential for a robust summer travel season in Europe, which could benefit the company’s ATM network. In the Money Transfer segment, despite some challenges, Gala sees a clear path to achieving higher EBITDA margins and highlights the healthy growth in cross-border transactions. The segment’s digital transactions have seen considerable growth, and there are opportunities to expand further into remittance markets. Based on these factors, Gala maintains a Buy rating and a price target of $140, indicating confidence in Euronet’s ongoing and future success.

According to TipRanks, Gala is a 2-star analyst with an average return of -0.3% and a 35.71% success rate. Gala covers the Financial sector, focusing on stocks such as American Express, PayPal Holdings, and Visa.

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Euronet Worldwide (EEFT) Company Description:

Euronet Worldwide, Inc. engages in the provision of electronic payment and transaction processing solutions for financial institutions, retailers, service providers and individual consumers. It operates through the following business segments: EFT Processing, Epay and Money Transfer. The EFT Processing sgement focuses in electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, and card issuing, and merchant acquiring services. The Epay segment offers prepaid mobile airtime and other electronic content and payment processing services for various prepaid products, cards and services throughout its worldwide distribution network. The Money Transfer segment refers to money transfer services, primarily under the brand names Ria, AFEX Money Express, and IME, and global account-to-account money transfer services under the brand names HiFX and xe. The company was founded by Daniel R. Henry and Michael J. Brown in 1994 and is headquartered in Leawood, KS.