DA Davidson maintains Buy on Euronet stock, $136 target

On Tuesday, DA Davidson expressed continued confidence in Euronet Worldwide (NASDAQ:EEFT), with analyst Peter Heckmann reiterating a Buy rating and maintaining a price target of $136.00. The firm’s outlook aligns with InvestingPro data showing current revenue growth of 8.46% and indicates the stock is currently undervalued. The firm’s outlook is based on the expectation that Euronet will achieve a 6%-8% constant currency, organic revenue growth over the next two years, alongside consistent annual margin expansion.

Heckmann anticipates that Euronet’s management will be able to bolster approximately 8-10% annual growth in adjusted EBITDA through share repurchases. The company’s current EBITDA stands at $610.7 million, with management actively buying back shares according to InvestingPro analysis. Additionally, the company is expected to realize 10%-12% annual growth in adjusted earnings per share (EPS), supported by a favorable P/E ratio of 13.45x. The analyst highlighted Euronet’s robust balance sheet, which provides the company with the flexibility to consider further acquisitions that could enhance this growth trajectory.

The Buy rating has been sustained with a price target of $136, which is based on an enterprise value (EV) multiple ranging from 8.5 to 9.0 times DA Davidson’s 2026 adjusted EBITDA forecast of $785 million. This valuation is set against the backdrop of the company’s average forward EV multiple of 10-11 times observed over the past six years.

Euronet Worldwide’s performance outlook is bolstered by its solid financial positioning and potential for strategic acquisitions. The company’s ability to generate consistent revenue growth and margin improvement underpins DA Davidson’s positive assessment and the reaffirmed price target.

In other recent news, Euronet Worldwide Inc. has reported several significant developments. The company posted strong third-quarter results with record revenues of $1.1 billion and an 11% year-over-year increase in adjusted earnings per share (EPS). The leadership expressed confidence in achieving a full-year adjusted EPS growth of 10% to 15%.

Euronet Worldwide also expanded its credit facility to $1.9 billion and extended its maturity. The amended credit facility, arranged with a syndicate of both domestic and international financial institutions, comprises a multi-currency borrowing tranche of $1.685 billion and a USD borrowing tranche of $215 million.

In terms of board changes, the company announced the addition of Brad Sprong, an ex-partner at KPMG, to its Board of Directors. Sprong’s extensive experience in financial transformations and regulatory shifts is expected to enhance the board’s collective knowledge and guide the company’s future direction.

On the analyst front, Oppenheimer increased the price target for Euronet Worldwide to $135, reflecting a positive outlook on the company’s growth prospects. The firm’s analysis suggests a 31% upside potential for Euronet’s stock and reiterates its Outperform rating.

Lastly, Euronet’s growth strategy extends beyond its financials, focusing on digital expansion and strategic partnerships. The company has made substantial investments in the REN payments platform, Dandelion cross-border payments, and merchant acquiring to ensure its long-term stability and continued revenue growth.

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