As I've mentioned in past articles on Euronet (EEFT),
this is a pretty classic "second chance" stock, as the stock's
generally high multiples and the company's somewhat erratic growth
trajectory have led to frequent double-digit declines that give
investors another chance to get into what has been a pretty good growth
story over the past decade-plus.
The shares have
chopped lower since the third quarter earnings report, and some soft
spots in fourth quarter earnings and guidance (for the first quarter)
haven't helped, not to mention ongoing worries about what the EU may do
regarding regulation of dynamic currency conversion. I still believe,
though, that there are attractive growth prospects in the ATM and money
transfer business, as well as the epay segment as it transitions away
from mobile top-up. If a revenue growth rate in the mid-to-high single
digits and a mid-teens growth rate for EBITDA and FCF are still
reasonable expectations, these shares offer meaningful upside into the
high-$90s, but the downside risk if EU reforms decimate DCC revenue is
significant (into the $60s).
Continue here:
Euronet Latest Pullback Comes With Much Greater Operating Uncertainties
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