Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Euronet Worldwide (NASDAQ:EEFT) dropped 15% Wednesday after the electronic payments provider turned in mixed fourth quarter results.
So what: Quarterly revenue rose 7% to $375.4 million, which translated to a 43% increase in adjusted earnings per share to $0.63. Analysts, on average, were looking for earnings of just $0.57 per share, but on higher revenue of $384.92 million.
For the current quarter, Euronet expects adjusted earnings of $0.45 per share, which is in line with analysts' expectations.
Now what: The top-line miss in Q4 wasn't that bad, but it does beg the question of where, exactly, Euronet thinks revenue will come in for the first quarter. What's more, Euronet's first quarter guidance represents adjusted earnings-per-share growth of "just" 20% over the same period last year, or a meaningful deceleration from both the most recent quarter and the 30% EPS growth the company posted in 2013.
That doesn't mean Euronet won't be able to pick up the pace as 2014 wears on, but the stock doesn't look particularly cheap, trading around 30 times last year's earnings and 16 times next year's estimates. For the time being, that's why I'm happy to stay on the sidelines and simply keep tabs on Euronet's progress.