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Why Euronet Worldwide Stock Sank Today

By Joe Tenebruso - Jul 24, 2019 at 3:00PM

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The second-quarter earnings report from the electronic payments provider failed to impress investors.

What happened

Shares of Euronet Worldwide ( EEFT 2.08% ) fell as much as 10% on Wednesday, following the release of its second-quarter financial results. Shares were down 6% as of 2:35 p.m. EDT.

So what

Euronet's revenue rose 11% year over year to $691.9 million, matching Wall Street's expectations.

Notably, the number of transactions conducted on Euronet's network increased by 19%, to 1.15 billion. "Our efforts to expand our network, state-of-the-art technology and broad product portfolio continue to result in strong double-digit earnings growth," chairman and CEO Michael J. Brown said in a press release.

All told, Euronet's adjusted (non-GAAP) operating income jumped 29% to $116.6 million, and its adjusted earnings per share leapt 28%, to $1.69. This EPS figure also matched analysts' estimates.

A stock chart that rises, then falls

Some investors may be taking profit in Euronet Worldwide. Image source: Getty Images.

Now what

Prior to Euronet's earnings release, its stock had risen more than 60% in 2019 and nearly 100% in the past year. So while the electronic payments provider's second-quarter results look relatively solid on the surface, its sales and profit figures simply matched -- rather than exceeded -- Wall Street's estimates, and some investors may be using that fact as a reason to sell and take some profit. Nothing in Euronet's report, however, would appear to alter the company's long-term fundamentals.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Euronet Worldwide, Inc. Stock Quote
Euronet Worldwide, Inc.
$118.49 (2.08%) $2.41

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