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We came across a Haussier thesis On Euronet Worldwide, Inc. (EEFT) on substitution by P14 Capital. In this article, we will summarize the thesis of the Bulls on EEFT. The action of Euronet Worldwide, Inc. (EEFT) was negotiated at $ 104.13 in May 5th. EEFT monitoring and p / e were 15.43 and 10.56 respectively according to Yahoo Finance.
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A customer using a mobile bank application at home to securely transfer money.
Euronet Worldwide (EEFT), formerly an ATM operator from Niche in Eastern Europe, has become a global fintech infrastructure supplier with operations covering more than 200 countries and territories. Founded in 1994 by Michael J. Brown, Euronet now generates $ 3.9 billion in annual income, divided almost uniformly on three additional segments: electronic transfer of funds (EFT), Epay Solutions and transfer of money. Each of these companies is not only geographically diversified but also structurally resilient, supported by secular growth trends. The money transfer segment, the largest of the company by income, includes the Ria, Xe and Dandelion brands. Despite market fears that stricter American immigration policies could harm the key transfer corridor between the United States and Latin America, the payment flows have remained robust. Deportations are down and although immigration entries can be moderate, the need for transfer of funds remains non -discriminated for many families. Even in a severe decrease scenario in which 20% of corridor income is lost, the impact for Euronet’s overall activities would be limited to around 2% of consolidated revenues – an easily digestible blow given the diversification and growth of the company in other regions.
Meanwhile, Euronet’s activities have a significant operating lever and pricing effect. A recent legal victory against Visa and Mastercard allowed the company to unlock the growth of exchange costs which had been artificially constrained from the pandemic. At the same time, increases in interior access ceilings in several countries have enabled Euronet to increase ATM supplements, which are almost a pure profit because they bypass the card networks. Although these changes are not entirely captured in average income by transaction due to a mixture of mixture to low value transactions, the financial impact is clear, the margins of the Baiia improving for eight consecutive quarters. The summer travel season adds more upwards, especially in Europe and Asia where Euronet has in -depth penetration of ATM in tourist areas. As travel volumes bounce, higher exchange volumes and overload costs are still increasing the margins.
The addition of another layer to history is Ren, the Euronet Cloud-Native Payment Payment Payment platform, which quickly becomes the jewel of the company’s crown. Unlike traditional monolithic banking systems, REN is based on microservices, the Angnostic of the Database and offers real -time processing capacities for the issue, acquisition, switching and management of the ATM network. It is used both internally and by external financial institutions, generating recurring income with high margin. In 2024, Ren has contributed 15% of the income and up to 25% of the EBITDA EFT, the gross margins reaching 80%. As Renon bursts, he moves the company’s assessment account more – an ATM operator focused on hardware to a Fintech infrastructure game led by software.
Despite this transformation, the market continues to mistreat Euronet’s assets, valuing it through the objective of Obsolete ATM dependence. However, species remain widely used in many countries, travel is recovered and the company is increasingly focused on software. With BPA GAAP which should increase by 16.4% during the exercise of $ 25 to 7.50 – after growth of 17.3% during the 2010 financial year and negotiating at only 14.6 x profits, Euronet offers a convincing assessment. A modest reassessment at 18x ​​p / e implies a stock market course of $ 135, 43% up the current levels. Even in a scenario without growth, the disadvantage seems to be limited in the mid -80s in the bass of $ 90, levels which historically held during the declines of the market. Like the NCR Voyix, Euronet is a poorly understood multi-segments fintech, including the undervalued platform has several catalysts to rewrite. The combination of resilient fund flows, the expansion of margins in EFT and the growth of high margin software of Ren presents a convincing investment case for equity and credit investors looking for asymmetrical return potential.
Euronet Worldwide, Inc. (EEFT) does not appear on our list of 30 most popular stocks among hedge funds. According to our database, 36 hedge fund portfolios held EEFT at the end of the fourth quarter which was 33 in the previous quarter. While we recognize the risk and potential of EEFT as an investment, our conviction lies in the conviction that certain AI actions are more promising to provide higher yields and do it within a shorter period. If you are looking for a more promising stock of AI than EEFT but which is negotiated within 5 times its income, consult our report on the Stock ai the cheapest.
