When I last wrote about Euronet (EEFT) in the summer of 2019, I wrote that although I didn’t really like the price/valuation at the time, “this is a somewhat unusual point in Euronet’s history, as I don’t see much to worry about.” Nature abhors a vacuum, and a new worry emerged about six months later, with the COVID-19 pandemic radically impacting travel in Europe, hammering the ATM business. The epay and money transfer businesses have held up much better, but with the ATM business as large as it is, Euronet basically saw a lost year in 2020.
Looking ahead from today, I do expect travel to start recovering in Europe; probably not so much in 2021, but in 2022 and beyond. I also expect ongoing branch reductions in Europe to drive more demand for the company’s ATMs from non-tourists. Beyond that, the epay business remains an underappreciated growth business, and the money transfer business continues to gain share. While Euronet remains an odd, and maybe under-followed, business, upside into the $180s merits some consideration.
Read more here:
Euronet Has Doubled Off Its Lows, But Isn't Fully Valued Yet
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