Euronet Worldwide currently holds roughly 1.56
B in cash with 248.26
M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 29.52. The company currently holds 1.36
B in liabilities with Debt to Equity (D/E) ratio of 0.94, which is about average as compared to similar companies. Euronet Worldwide has a current ratio of 1.75, which is within standard range for the sector.
Investing in Euronet Worldwide, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Euronet Worldwide along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Euronet Worldwide's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Euronet Worldwide. Your research has to be compared to or analyzed against Euronet Worldwide's peers to derive any actionable benefits. When done correctly, Euronet Worldwide's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Euronet Worldwide.
How important is Euronet Worldwide's Liquidity
Euronet Worldwide
financial leverage refers to using borrowed capital as a funding source to finance Euronet Worldwide ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Euronet Worldwide financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Euronet Worldwide's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Euronet Worldwide's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Euronet Worldwide's total debt and its cash.
Euronet Worldwide Gross Profit
Euronet Worldwide Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Euronet Worldwide previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Euronet Worldwide Gross Profit growth over the last 10 years. Please check Euronet Worldwide's
gross profit and other
fundamental indicators for more details.
Euronet Worldwide Correlation with Peers
Investors in Euronet can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Euronet Worldwide. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Euronet Worldwide and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Euronet is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Euronet for more details
What is driving Euronet Worldwide Investor Appetite?
We consider Euronet Worldwide very steady.
Euronet Worldwide secures Sharpe Ratio (or Efficiency) of 0.0123, which denotes the company had 0.0123% of return per unit of risk over the last 3 months. Our standpoint towards predicting the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-eight
technical indicators for Euronet Worldwide, which you can use to evaluate the future volatility of the firm. Please confirm Euronet Worldwide Coefficient Of Variation of 1656.66,
downside deviation of 1.94, and Mean Deviation of 1.41 to check if the risk estimate we provide is consistent with the expected return of 0.0219%.
Our take on Euronet Worldwide small drop
Newest maximum drawdown is at 9.04. Euronet Worldwide has relatively low volatility with skewness of -0.34 and kurtosis of 0.27. However, we advise all investors to independently investigate Euronet Worldwide to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Euronet Worldwide's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Euronet Worldwide's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Bottom Line On Euronet Worldwide
Whereas other entities in the software—infrastructure industry are either recovering or due for a correction, Euronet may not be as strong as the others in terms of longer-term growth potentials. The bottom line, as of the 20th of October 2021, we believe that at this point, Euronet Worldwide is
undervalued with
low chance of bankruptcy within the next 2 years. Our current buy vs. sell advice on the firm is
Strong Buy.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Euronet Worldwide. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
editors@macroaxis.com
