Euronet Worldwide (EEFT) Moves 10.1% Higher: Will This Strength Last?

This story originally appeared on Zacks

Euronet Worldwide (EEFT) shares rallied 10.1% in the last trading session to close at $133.25. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock’s 2.7% gain over the past four weeks.

The fundamental driving factor can be attributed to the fact that Euronet joined the S&P MidCap 400, which will be effective before trading opens on Feb 1. Compass Minerals International, Inc. CMP got replaced as a result of Euronet’s inclusion in the S&P MidCap 400. Reasons such as solid performances exhibited by Euronet’s Electronic Funds Transfer, epay and Money Transfer businesses might have acted as tailwinds for the company.
This electronic payments and transactions processor is expected to post quarterly earnings of $1.33 per share in its upcoming report, which represents a year-over-year change of +19.8%. Revenues are expected to be $807.42 million, up 14.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Euronet Worldwide, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on EEFT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

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Euronet Worldwide, Inc. (EEFT): Free Stock Analysis Report
 
Compass Minerals International, Inc. (CMP): Free Stock Analysis Report
 
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