Friday, July 5, 2019

Euronet Thriving, With All Units Contributing To Growth

I thought Euronet (EEFT) was undervalued back in August, as fears of what the EU might do regarding dynamic currency conversion (a meaningful source of high-margin revenue for Euronet) weighed on the shares. Since then, not only did the EU opt for the best-case scenario for Euronet, but Visa (V) lifted its restrictions on DCC via ATMs globally, and businesses like money transfer and epay continue to grow nicely.

I’d previously valued Euronet on a risk-weighted basis that accounted for the risk of more severe DCC restrictions, but not only are the down-side scenarios off the table, the Visa decision marks a material improvement to the outlook. Although I don’t think Euronet shares look all that cheap now, these shares have a history of above-average volatility, so I’d keep an eye on them from time to time (or program a price alert) in case the shares sell off yet again on market jitters.

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Euronet Thriving, With All Units Contributing To Growth

1 comment:

Unknown said...

Stephen, thanks for your analysis!