A Close Look at Euronet Worldwide (EEFT: NASDAQ)
Euronet Worldwide (EEFT: NASDAQ) is a renowned provider of varied digital payment services that operates worldwide.
For a very long time, this company has been on the “strong-buy” list for investors. However, with the recent coronavirus crisis, EEFT stocks took a nosedive. Their value has been rising steadily over the last few weeks. But it’s not yet near the pre-pandemic levels. Also, the global recession is guaranteed to hit this particular business extremely hard.
All things considered, investors are right to wonder whether they should be selling or buying EEFT stocks.
However, even while the situation looks quite bad, the long-term prognosis for Euronet remains good. It provides too many essential services that only become more important in the changed post-coronavirus world. XE Money Transfer, which belongs to Euronet Worldwide, in particular, has fantastic prospects.
Euronet Worldwide EEFT: Stock Analysis
No matter how difficult things are now, Euronet Worldwide is one of the foremost global providers of:
- ATM services
- POS services
- Electronic FX services
- Credit and debit card services
- Electronic payments software and services
Euronet has been operating since 1994 and throughout its history it purchased and developed multiple subsidiaries. The names operating under Euronet Worldwide include but aren’t limited to:
- AFEX Money Express
- XE (and HiFX)
The headquarters of Euronet Worldwide is located in Leawood Kansas. However, it’s only recently that Euronet acquired a way to expend its ATM outsourcing services to the US. This happened after the purchase of Dolphin Debit in 2020. It’s one of the reasons why EEFT prospects are good in spite of the current slump in stock value.
Partnering with Standard Chartered in 2020 is one of the other reasons why EEFT is sure to keep rising. Through this deal, Euronet is now able to offer currency conversion services through ATMs.
Simply put, customers using this service in covered countries now have a chance to pay in their own currency. This allows them to avoid additional expenses of converting to the local currency.
EEFT fell hard during the great coronavirus stock market crash but the important thing to remember is that it’s rising steadily. Nearly every business out there is struggling now.
And it’s true that the recession will have a negative impact on Euronet Worldwide because the volume of money transfers decreased. However, one mustn’t forget that Euronet owns several essential money transfer services, of which XE Money Transfers is one.
Demand for those is increasing rapidly and will continue to do so. And with other benefits Euronet can offer, EEFT is sure to keep providing investors with good returns soon.
XE Money Transfers Within Euronet Worldwide
XE is Euronet’s foremost money transfer provider. It’s also one of the world’s most popular remittance service.
However, at the moment, XE isn’t doing so well because of the reduction in remittances. The World Bank predicts that this amount will go down to a record low in recent history. This is why XE, and subsequently Euronet, is in trouble.
And it’s true that the reduction in transfer volume is very bad for business. However, the important thing to remember is that this won’t last forever. In fact, things are picking up already as stock markets are getting back up.
International investors are one of the main consumer groups that use the services of money transfer companies. Other are small businesses that either receive orders or order supplies from other countries and migrant workers.
The latter now have little opportunity to work because of lockdowns. But those are lifting, which means there should be job opportunities for migrants soon. And with them come remittances.
Moreover, because of the isolation caused by the pandemic, the use of fintech apps has increased by 72%. XE is one of those apps that can enjoy the increase in interest from consumers.
Euronet Worldwide pulled a masterstroke with it by uniting XE with another FX broker, HiFX, which is purchased in 2014. In 2019, Euronet united them under one brand, which immediately boosted the service as HiFX is regulated by the FCA. It’s authorized to offer service in multiple countries, including Canada, New Zealand, and Australia.
This level of authorization makes XE highly attractive to customers who seek security in their transfers. XE Money Transfers, as a part of Euronet Worldwide, can give that and more.
Of course, the money transfer industry is currently dominated by TransferWise. That company is valued at over $3.5 billion and it’s the absolute leader in this field.
However, for all its current power, TransferWise is facing the same kind of problems as XE and other FX services. Therefore, it’s possible for the company’s competitors to use this period of instability to win over a bigger part of the market. With the resources of Euronet backing it, XE has every chance to near the leading position.
This will definitely happen as the demand for this type of service is only getting higher. Therefore, EEFT will keep rising along with the value of XE.
Is It a Good Idea to Invest in EEFT in Times of Crisis?
Yes, it’s definitely a good idea to invest in EEFT, even if it doesn’t seem like it at the moment. This stock took a beating because of the market crash, but it will inevitably recover. Euronet Worldwide is too big a player in the payment industry. Therefore, investors can be sure that they will get steadily growing returns long-term.
However, this is a plan for the future. At the moment, the business is recovering and will require some time to do this. So, if you are looking for a way to raise some money fast, this isn’t a good option for you.
On the other hand, the current situation allows you to buy EEFT stocks cheaper. Then, you only need to wait for a little while until it starts bringing the returns you would expect from a fintech world giant.
Euronet Worldwide is working relentlessly to make sure all of its subsidiaries grow and develop offering better services. Its innovations and the fact that its subsidiaries can legally operate in multiple countries make sure that this corporation will get back to the top.