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The recent bank failures are giving investors headaches, but they should not deter them from investing in the financial sector. Given the solid growth prospects of Everi Holdings (EVRI), Forrester Research (FORR) and CPI Cards Group (PMTS), investors can benefit from buying financial stocks with strong fundamentals. increase. keep reading.
Headwinds from high inflation, aggressive interest rate hikes and the worst banking crisis since 2008 have dampened investor sentiment. The financial sector is under the scanner as investors remain nervous about the stability of the financial sector following last month’s bank failures.
However, financial regulators acted quickly to restore stability. President Biden reassured the banking system is safe.every), Forrester Research, Inc. (FORR), and CPI Card Group Inc. (PMTS).
Let’s discuss what makes these financial stocks a great investment choice.
Last month’s bank failures came as a surprise and led to a plummeting bank and financial name. The sale therefore provides an excellent opportunity to buy a financial company with solid growth prospects.
As the February report revealed, inflation has come down significantly, but well above the Federal Reserve’s 2% target.Because of the banking crisis, the central bank 25 basis points rate hikein line with analyst estimates.
With inflation remaining above the Fed’s comfort level, the central bank may push for higher rate hikes. Restrictive monetary policy may be difficult for borrowers, but as borrowing gets higher, higher interest rates boost earnings for financial firms.
Moreover, the long-term outlook for the financial services industry looks solid due to the growth and potential of digital transactions. The financial services market Growing to $37.48 Trillion at a CAGR of 7.5% Investor interest in financial stocks is fueled by the iShares US Financial Services ETF (IYG) 6.9% return over the last 6 months.
Given these factors, investors may buy financial stocks EVRI, FORR, and PMTS.
Everi Holdings Co., Ltd. (every)
EVRI develops and provides entertaining gaming content, gaming machines, gaming systems and services for land-based and iGaming operators around the world. It operates through two segments: Gaming and Financial Technology Solutions.
On February 21, 2023, Venuetize, EVRI’s mobile technology and advanced e-commerce platform for the sports, hospitality and entertainment industry, announced a strategic agreement with 1839 Labs. spectators, and guests within sports and other complexes around the world.
Darren Simmons, Executive Vice President and FinTech Business Leader at EVRI, said the deal showcases the unique mobile-focused consumer engagement capabilities of EVRI’s Venuetize platform, while also improving the platform to open other opportunities. We believe this is an important opportunity to pursue Last October, EVRI acquired the strategic assets of his Venuetize.
In terms of EBIT margin over the last 12 months, EVRI of 27.26% exceeded the industry average of 7.77% by 250.8%.Its 11.47% trailing 12 months Leverage FCF Margin 499.3% higher than the industry average of 1.91%. Similarly, 12-month CAPEX/Sales of 16.30% is 407.1% higher than the industry average of 3.21%.
EVRI’s total revenue increased 13.8% year-over-year to $205.36 million in the fourth quarter ended December 31, 2022. Operating income increased 7.8% year-over-year to $51.59 million.
Additionally, Adjusted EBITDA was $93.4 million, an increase of 5.2% from the prior year period. Free cash flow also increased him 111.3% from the year-ago quarter to $41.7 million.
EVRI’s fiscal 2024 EPS is expected to grow 13.6% year-over-year to $1.18. Revenue for the quarter ending March 2023 is expected to grow 9% year-over-year to $191.47 million. Impressive performance above expectations, beating consensus EPS expectations in three of the last four quarters.
The stock is up 19.5% year-to-date and closed the last trading session at $17.15.
EVRI’s strong fundamentals are POWR ratingThe overall rating is B, which is equivalent to a purchase in our own rating system. POWR Ratings evaluate stocks by 118 different factors, each with its own weighting.
Additionally, there is an A grade for quality and a B grade for value and emotion.Within Financial Services (Enterprise) In the industry, it ranks second out of 103 stocks. To see EVRI’s additional POWR ratings for Growth, Momentum, and Stability: click here.
Forrester Research (FORR)
FORR operates as an independent research and advisory services firm. The company operates in his three segments. consulting; and events. We sell our products and services through our direct sales force in various locations around the world.
In terms of gross margin over the last 12 months, FORR’s 58.39% is 99.3% higher than the industry average of 29.29%. Its 7.57% 12-month return on total capital is 8.8 percentage points higher than the industry average of 6.96%. Similarly, the trailing 12-month leveraged FCF margin of 8.48% is 120.1% higher than the industry average of 3.85%.
On January 23, 2023, FORR introduced Forrester Decisions for Partner Ecosystem Marketing, the next generation of Forrester Decisions, a channel marketing service.
Maria Chien, Vice President and Research Director at FORR, said:
For the fiscal year ended December 31, 2022, FORR’s total revenue increased 8.8% year-over-year to $537.79 million. The company’s adjusted net income increased 16.5% year-on-year to $47.22 million. Additionally, adjusted EPS was $2.46, up 17.7% year-over-year.
FORR’s fiscal 2024 EPS and earnings are expected to increase 14.1% and 5.4% year-over-year to $2.67 million and $556.91 million, respectively. The company has been outperforming consensus’s EPS forecast for each of the last four quarters, delivering an amazing performance.
Over the past month, the stock has fallen 1.6% and closed its last trading session at $32.35.
FORR’s POWR Rating reflects a solid outlook. The stock has an overall rating of A, which corresponds to a strong buy in our proprietary rating system. No. 1 in the industry. There is an A grade for quality and a B grade for sentiment.
In total, we assess FORR at eight different levels. In addition to the above, we also give FORR ratings for growth, value, momentum, and stability.Get all FORR ratings here.
CPI Card Group Co., Ltd. (PMTS)
PMTS is engaged in the design, manufacture, data personalization, packaging and fulfillment of financial payment cards. It works through debit, credit, and prepaid debit segments.
In terms of EBIT margin over the last 12 months, PMTS’s 16.63% exceeded the industry average of 4.61% by 260.9%. Its 7.68% 12-month net profit margin is 183.7% above the industry average of 2.71%. Similarly, the asset turnover ratio of 1.68x over the last 12 months is 178.8% higher than the industry average of 0.60x.
For the fourth quarter of the fiscal year ended December 31, 2022, PMTS’ total net sales increased 35.7% year-over-year to $126.44 million. The company’s operating revenue rose 146% year-on-year to his $22.65 million. Its net income increased significantly year-on-year to $12.48 million.
Additionally, EPS was $1.06, up 100% from the prior year period. Also, his adjusted EBITDA increased 100.3% year-over-year to $27.2 million.
For the quarter ending March 31, 2023, PMTS EPS and revenue are expected to increase 5.9% and 2.1% year-over-year to $0.54 and $113.8 million, respectively. It has a commendable history of astonishing earnings, beating consensus EPS estimates in each of its four subsequent quarters.
Over the past six months, the stock has gained 185.6% and closed its last trading session at $45.01.
PMTS’ POWR rating reflects its positive outlook. The overall rating is B, which is equivalent to a purchase. Ranked #3 in the Financial Services (Enterprise) industry. Additionally, it has an A grade for growth and a B grade for sentiment.
click here To see other ratings of PMTS for Value, Momentum, Stability, and Quality.
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EVRI shares rose $0.14 (+0.82%) in pre-market trading on Monday. Year-to-date, the EVRI is up his 20.49%, while the benchmark S&P 500 index is up his 7.33% over the same period.
About the Author: Malaika Alphonsus
Malaika’s passion for writing and interest in financial markets prompted her to pursue a career in investment research. We will assist you in making a decision.
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