NEW YORK ( TheStreet) -- Euronet Worldwide (Nasdaq: EEFT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 12.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EURONET WORLDWIDE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EURONET WORLDWIDE INC turned its bottom line around by earning $0.71 versus -$0.76 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $0.71).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 118.0% when compared to the same quarter one year prior, rising from -$60.68 million to $10.90 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the IT Services industry and the overall market, EURONET WORLDWIDE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
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Euronet Worldwide, Inc. provides electronic payment services, and transaction processing and distribution solutions to financial institutions, retailers, service providers, and individual consumers. The company operates through three segments: EFT Processing, epay, and Money Transfer. Euronet Worldwide has a market cap of $932.4 million and is part of the services sector and diversified services industry. Shares are up 6.2% year to date as of the close of trading on Wednesday.

You can view the full Euronet Worldwide Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff

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