Euronet's Valuation Has Improved, But So Has The Business

I had a nice little thing going with Euronet (NASDAQ:EEFT). I'd write about this largely unknown operator of ATMs, convenience payment services and money transfers every six to 12 months; the shares would be around 10% undervalued, they'd go up around 10%, and we'd do it all over again.

Although I don't see quite the same level of undervaluation as in past updates, I still believe it's a good company trading a little bit below fair value. In my investing experience, it has generally worked out better to buy a good company that's a little bit cheap than to buy an inferior company that's trading at a wider apparent discount to fair value. I'd also note that there are visible catalysts that could improve both the ATM and money transfer businesses in the relatively near future and drive higher earnings expectations.

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Euronet's Valuation Has Improved, But So Has The Business

Seeking Alpha: Euronet's Multiple Moving Parts Still Moving Forward

Euronet Worldwide (NASDAQ:EEFT) is an odd collection of businesses, but it's a collection that seems to work - in part, at least, because it's a business built around collecting a small piece of transactions from what I would generally consider to be convenience services. This isn't a flawless business, but Euronet seems to have found its niche and it's one that I think can continue to support a respectable level of growth.

I thought the shares were a little undervalued last time around, and the stock is up a little more than 10% then. Once again, the shares look a little undervalued to me, with that valuation predicated on a long-term slowdown in revenue growth to the mid-single digits. Given the opportunities the company has to expand its ATM network, its ePay business, and its money transfer operations, this could be an interesting name to watch/own for some time.

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Euronet's Multiple Moving Parts Still Moving Forward