Euronet (EEFT): When Bad News Creates the Best Opportunities

On October 23, 2025, Euronet Worldwide reported Q3 earnings that sent investors scrambling:

📉 Revenue: +1% constant currency (vs. +6% in Q2)
📉 All three segments softer: EFT Processing steady but unexciting, epay -5% reported, Money Transfer flat
💬 Management commentary: "Macroeconomic impacts affecting all three businesses"
🛂 Immigration headwinds: US-Mexico remittance corridor flat YoY

The stock dropped -4.8% that day to $84.36, and has since traded down to $82.27.

The narrative was clear: "Growth is dead. Immigration policy killing Money Transfer. Macro weakness. Run."

But this is exactly when the best opportunities appear—when everyone sees the same negative story and nobody is willing to look deeper.

Here's the key statistic everyone ignored:

Let me spell this out:
🔸 Euronet's US-Mexico corridor: FLAT
🔸 Overall US-Mexico market: -12% (Reuters data)
🔸 Euronet's market share gain: +12 percentage points

This isn't weakness. This is a market share massacre. While competitors hemorrhaged volume, Euronet held the line. When immigration policy normalizes (and it will), Euronet will own significantly more of a bigger pie.

Here's what really caught my attention:

Q3 EBITDA Margin: 21.3% (+100 basis points YoY)

Wait... revenue up only 1% but margins expanding 100bps? How is that possible?

The digital transformation is printing money:

📱 epay: 70% of transactions now digital (vs. 40% in 2020)
📱 Money Transfer: Digital to Consumer segment +32% YoY
📱 Digital margins: 22-25% vs. physical 12-15%

The mix shift is structural and unstoppable. Every quarter, more transactions shift from low-margin physical (retail locations, agent networks) to high-margin digital (apps, web). This margin expansion continues regardless of revenue growth.

Despite Q3 softness, management maintained 12-16% EPS growth guidance for full year 2025.

Translation: They see Q3 as a temporary macro blip, not structural deterioration. The earnings call made this clear—immigration policy uncertainty, global economic softness, but fundamentals intact.

⏰ Timing: Late October 2025 (shareholder vote imminent)

The Deal:

💵 Purchase price: $248M all-stock (no cash outflow)
💳 What you're buying: Credit card issuing platform
🏦 Clients: Goldman Sachs, American Express, Gemini, Cardless (40+ total)
📊 TAM: $9-10B (CoreCard has <1% penetration)
✅ Accretive to EPS in first 12 months

Why This Matters:

Euronet's existing Ren platform processes debit/prepaid cards. CoreCard adds credit/revolving card processing. This transforms Euronet from a single-product processor into a full-stack card issuing platform.

The TAM is massive:
🏢 Fintechs/NeoBanks: $3-4B (fastest growth segment)
🏦 Tier 2/3 banks: $4-5B (modernization opportunity)
💼 Commercial cards: $2-3B (B2B digitalization)

💬 Management commentary: "The response from our customers and sales prospects has been very, very encouraging." — Rick Weller, CFO

💎 Value Attribution: +$22/share

This was buried in the Q3 call and nobody has it modeled.

🤝 The Partnership: Fireblocks (enterprise-grade crypto infrastructure)

The Use Cases:

1️⃣ Treasury efficiency: Float management in stablecoins reduces FX conversion costs
2️⃣ Cross-border settlement: Instant settlement vs. 2-3 days traditional banking
3️⃣ New corridors: Crypto-native users for remittances and B2B payments

🏆 Why Euronet Wins:

The crypto ecosystem has a massive problem: getting fiat in and out. Euronet has:
🏦 4 billion bank accounts
📱 3.4 billion mobile wallets
🏪 638,000 physical locations
🌍 Licenses in 200+ countries

This is the largest fiat↔crypto bridge on the planet. When someone wants to cash out USDC in rural Mexico, or a business wants to settle a cross-border payment in stablecoins, Euronet's network is unmatched.

📊 TAM Sizing:
💰 Global stablecoin market cap: $150B+ (2025)
💸 Cross-border stablecoin volume: $10T+ annually
🎯 Euronet addressable: 5-10% of on/off-ramp volume
💵 Fee potential: 0.5-1.0% (vs. traditional remittance 3-5%)

💎 Value Attribution: +$6-18/share (conservative to bull case)

📢 Q3 Announcements:
🏦 Citibank partnership (wholesale cross-border infrastructure)
🇦🇺 Commonwealth Bank of Australia (launched Q3, Australia's largest bank)

🤔 What is Dandelion?

It's Euronet's B2B wholesale platform. Banks want to offer cross-border payments to customers but don't want to build the infrastructure. Dandelion provides the pipes—Euronet handles settlement, compliance, FX, payout networks. The bank keeps the customer relationship.

💰 Why This is High-Margin:
✅ No consumer marketing spend (bank brings the customer)
✅ Enterprise contracts (recurring revenue, long-term)
✅ Wholesale pricing (lower fees but massive scale)
✅ Leverages existing Money Transfer infrastructure (incremental margin very high)

📈 The Pipeline:

If Citi and Commonwealth Bank (two of the largest banks in their regions) are adopting Dandelion, others will follow. This is classic enterprise SaaS land-and-expand.

💎 Value Attribution: Embedded in Money Transfer catalyst (+$24/share)

Let's compare Euronet to payment processing peers:

| Company | P/E (LTM) | EV/EBITDA | Rev Growth (3Y) | EBITDA Margin |
|---------|-----------|-----------|-----------------|---------------|
| Fiserv | 19.5x | 11.2x | +8% | 38% |
| FIS | 15.2x | 9.8x | +5% | 32% |
| Global Payments | 12.8x | 8.5x | +7% | 26% |
| EEFT | 12.1x | 5.2x | +8% | 21% |

🚨 Euronet trades at:
📉 38-46% discount to peers on P/E
📉 42-54% discount on EV/EBITDA
📈 Despite comparable revenue growth
📈 Despite SUPERIOR margin expansion (+100bps Q3 vs. peers flat)

❓ Why the discount?

The market still thinks "dying ATM company." Reality:
🏧 ATMs = only 31% of revenue (EFT Processing segment)
💸 Money Transfer = 43% (growing, digital accelerating)
📱 epay = 26% (70% digital, margin expansion)

This is a fintech platform company executing a digital transformation, being priced as a legacy ATM operator.

Here's the bridge to $165:

```
$82 Current price (post-Q3 selloff)

+$33 Baseline EPS growth ($8.61 → $12.56 @ 13x P/E)
+$22 CoreCard acquisition (vote imminent, integration 2026)
+$24 Money Transfer digital + Dandelion + stablecoins
+$16 epay digital distribution (margin expansion intact)
+$6 Stablecoins new catalyst (Q1 2026 launch)
-$18 Risk discount (immigration, integration, macro)

=$165 Target price

✅ Not hopium. Math.

| Year | EPS | Driver |
|------|-----|--------|
| 2024 | $8.61 | Base year |
| 2025E | $10.50 | 12-16% growth (guidance maintained) |
| 2026E | $11.75 | CoreCard accretion begins, digital mix shift |
| 2027E | $12.56 | Full CoreCard integration, stablecoins scaling |

At 13x P/E (peer average): $12.56 × 13 = $163

Conservatively rounded: $165

When $EEFT was $86 and Q2 showed +6% growth, nobody cared.

Now it's $82, Q3 showed +1% growth, and everyone's scared.

But the fundamentals are stronger:
✅ Margin expansion accelerating (+100bps)
✅ Market share gaining (+12pp in US-Mexico)
✅ New catalyst announced (stablecoins, not in any model)
✅ Valuation now 5% cheaper for same $165 target

This is the definition of a mispriced asset.

The shareholder vote is scheduled for late October 2025 (imminent). Approval is highly likely based on management confidence.

When deals close, stocks typically pop 5-10% as uncertainty resolves. That's a near-term catalyst within days.

Consensus price target: $126 (per Street estimates)

My target: $165

The $39 difference? Stablecoins + margin expansion underestimated.

Analysts are modeling Euronet as a mature slow-growth payment processor. They're missing:
📱 Digital transformation margin tailwind (+300-400bps over 3 years)
🪙 Stablecoin launch Q1 2026 (entirely new revenue stream)
🌐 Dandelion B2B scaling (Citi + Commonwealth = validation)

If US immigration restrictions continue for 2+ years, Money Transfer growth could stall at 3-5% CAGR (vs. 10% target).

📉 Impact: EPS $11.00 vs. $12.56, stock $130-140 (-12% to -17% from target)

🛡️ Mitigation: Market share gains visible (+12pp Q3), digital acceleration (+32% YoY), Dandelion B2B less consumer-dependent

Technology incompatibility with Ren platform, or client defections (Goldman, Amex move to FIS/Fiserv).

📉 Impact: CoreCard revenue $40M vs. $135M target, dilutive instead of accretive

🛡️ Mitigation: Management "very, very encouraged" by customer response, Goldman/Amex are referenceable logos that attract other fintechs

Cash usage drops faster than expected due to digital payments proliferation.

📉 Impact: EFT Processing revenue -13%, segment EBITDA -$60M, total EPS -$1.05

🛡️ Mitigation: EFT only 31% of revenue, card issuing (Ren + CoreCard) offsetting ATM decline, merchant acquiring growing

SEC restrictions on stablecoin intermediaries delay or cancel Q1 2026 launch.

📉 Impact: Loss of $6-18/share upside from stablecoins

🛡️ Mitigation: Fireblocks is enterprise-grade with strong compliance, Euronet is payments intermediary (not issuer, lower regulatory risk)

Strong USD vs. EUR and emerging market currencies. 60%+ of revenue is non-USD.

📉 Impact: Constant currency growth +6%, but reported -2% due to FX

🛡️ Mitigation: Management reports constant currency metrics (investors should focus on this), FX is temporary not structural

| Scenario | Probability | Price Target | Return |
|----------|-------------|--------------|--------|
| 🐻 Bear Case | 20% | $105 | +28% |
| 🎯 Base Case | 50% | $165 | +101% |
| 🚀 Bull Case | 25% | $210 | +155% |
| 💥 Disaster | 5% | $75 | -9% |

💰 Expected Value: $161 (+96% from $82)

⚖️ Risk/Reward: 3.2:1

- Immigration restrictions persist 2+ years (Money Transfer 3% CAGR)
- CoreCard integration delays (revenue $60M, not accretive)
- ATM decline -8% annually (EFT segment shrinks)
- Stablecoins fail to launch (regulatory)
- EPS: $9.20 @ 10x P/E = $92, realistic $105

- CoreCard delivers $135M revenue (2027), accretive
- Money Transfer 10% CAGR despite immigration (Dandelion, digital, stablecoins offset)
- epay 85% digital, 15% margin (Q3 softness temporary)
- Stablecoins scale to $75M revenue (2027)
- EPS: $12.56 @ 13x P/E = $163, rounded $165

- Immigration normalizes by Q2'26 (US-Mexico returns to +8% growth)
- CoreCard cross-sell explosive (Euronet bank clients adopt, $180M revenue)
- Stablecoins scale to $150M revenue (20% of Money Transfer digital volume)
- EPS: $15.50 @ 14x P/E = $217, conservatively $210

- Europe bans DCC (dynamic currency conversion) = major regulatory hit
- CoreCard clients defect (Goldman, Amex leave)
- Recession → remittance volumes -15% (unemployment spike)
- EPS: $6.50 @ 9x P/E = $59, floor $75 (net cash support)

🎯 Entry: $78-85 (current range)
🚀 Target: $165 (+101% from $82)
🛑 Stop Loss: $70 (-15%)
⏰ Time Horizon: 24-30 months
📊 Position Size: 8-12% of portfolio
⚖️ Risk/Reward: 3.2:1

This isn't a trade. It's a thesis. I'm buying a quality company hitting a temporary macro headwind, at a stupid valuation, with three major catalysts about to hit.

✅ CoreCard shareholder vote approval
✅ Full-year 2025 results: EPS within 12-16% growth guidance?
✅ 2026 guidance: EPS $11+ needed (on track to $12.56 in 2027)
✅ Immigration policy update: US-Mexico stabilizing?

✅ Stablecoin launch announcement (Fireblocks go-live)
✅ CoreCard integration roadmap (client retention 40+ clients)
✅ Money Transfer digital penetration: 20%+ (vs. 16% Q3'25)
✅ EBITDA margin: 20%+ sustained

✅ CoreCard cross-sell wins (Euronet bank adopting credit issuing)
✅ Stablecoin volume metrics (% of Money Transfer digital)
✅ US-Mexico corridor: Return to +5-8% growth?

✅ Macro selloff with no fundamental deterioration
✅ FX-driven miss but constant currency growth +5-6% returns
✅ CoreCard vote approval + strong integration roadmap

❌ CoreCard integration issues (client defections, tech problems)
❌ Immigration policy worsens (US-Mexico -10% for 2 consecutive quarters)
❌ Stablecoin launch fails (regulatory delay, Q1'26 miss)

✅ 2027E EPS $12.56 achieved
✅ P/E re-rates to 13x (peer average)
✅ All three catalysts delivered (CoreCard, Money Transfer, epay)

When $EEFT was $86 and Q2 was +6% growth, nobody cared.

Now it's $82, Q3 was +1%, everyone's scared.

But look at what's actually happening:
✅ Valuation 5% cheaper = higher return
✅ CoreCard vote imminent (this week)
✅ Stablecoins announced (new upside)
✅ Market share GAINING (+12pp)
✅ Margins EXPANDING (+100bps)

The thesis is STRONGER today than it was 2 weeks ago.

That's how you find 3-baggers: when they're hated at the bottom, not loved at the top.

Quality company + temporary headwind + stupid valuation + catalysts loading = opportunity.

Euronet at $82 is a fintech platform company executing a digital transformation (70% epay digital, 16% Money Transfer digital, CoreCard credit issuing TAM, Q1'26 stablecoin launch) at 12x P/E while growing EPS 12-16% and expanding margins +100bps despite temporary immigration headwinds.

The market is pricing in "dying ATM company." Reality is "fintech platform with four catalysts loading."

🎯 Target: $165
⏰ Time horizon: 24-30 months
⚖️ Risk/reward: 3.2:1

This is a BUY.

⚠️ Disclaimer: This is not financial advice. I own shares of EEFT. This analysis represents my personal opinions and could be completely wrong. Do your own research. See full 41-page investment thesis for detailed assumptions and risks.