Shares of Euronet Worldwide (NASDAQ:EEFT) fell more than 11% on Thursday, as concerns about the novel coronavirus outbreak continued to weight on the "war on cash" payments company. The outbreak is threatening the global travel industry, which in turn could impact Euronet's international ATM and currency conversion businesses.
COVID-19 concerns are weighing heavily on the travel industry, with investors increasingly worried that the outbreak will lead to a weak spring break and summer travel season. That, in turn, is causing declines in a number of companies with indirect exposure to travel, including Euronet.
Euronet is a provider of ATMs, point-of-sale services, and currency exchange, which has built a strong business providing cash to international tourists. The fear is that if people aren't traveling, they will not be using Euronet's ATMs, cutting into the company's growth plans.
With the decline, shares of Euronet are now down 30% year to date. The threat is real, but the sell-off feels overdone. Wells Fargo analyst Timothy Willi earlier this week estimated that Euronet's direct exposure to tourism is about 25% of earnings. If so, the current sell-off would be drastic even if tourism temporarily dries out completely.
Markets are currently in no mood to take on risk, and Euronet could fall further in the days and weeks to come as the coronavirus story continues to play out. But for long-term holders able to ride through the turbulence, this is still a good stock to own.