Euronet Worldwide (NASDAQ:EEFT) Loses $214 Million, Corporate Earnings and Investor Returns Trend Down for Three Years

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In order to justify the effort of picking individual stocks, it is worth striving to beat the returns of an index fund. But in any portfolio, some stocks are likely to fall below this benchmark. Unfortunately, this has been the case for longer Euronet Worldwide, Inc. (NASDAQ:EEFT) shareholders, as the stock price has fallen 42% over the past three years, well below the market return of about 36%. And over the past year, the stock price has fallen 32%, so we doubt many shareholders will be thrilled. Moreover, it fell by 18% in about a quarter. It’s not much fun for the holders.

Given that the past week has been tough for shareholders, let’s take a look at the fundamentals and see what we can learn.

Before looking at performance, know that our analysis indicates that EEFT is potentially undervalued!

To quote Buffett, “Ships will circumnavigate the globe, but the Flat Earth Society will prosper. There will continue to be wide gaps between price and value in the market…’ By comparing earnings per share (EPS) and share price changes over time, we can get an idea changes in investors’ attitude towards a company over time.

Euronet Worldwide has seen its EPS decline at a compound rate of 19% per annum over the past three years. This drop in EPS is not far off the rate of decline in the share price, which was 17% per year. So it seems that investors’ expectations of the company remain fairly stable, despite the disappointment. It appears that the stock price reflects the decline in earnings per share.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

NasdaqGS: EEFT Earnings Per Share Growth September 21, 2022

We consider it positive that insiders have made significant purchases over the past year. That said, most people consider profit and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a careful review of historical growth trends, available here.

A different perspective

While the wider market lost around 16% in the twelve months, Euronet Worldwide shareholders fared even worse, losing 32%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance capped a bad patch, with shareholders facing a total loss of 1.9% per year over five years. Generally speaking, long-term stock price weakness can be a bad sign, although contrarian investors may want to seek out the stock in hopes of a turnaround. It’s all well and good that insiders have been buying stocks, but we suggest you check here to see what price insiders were buying at.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Valuation is complex, but we help make it simple.

Find out if Euronet in the world is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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