Investors interested in stocks from the Financial Transaction Services sector have probably already heard of Evertec (EVTC) and MasterCard (MA) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Score ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Evertec (EVTC) as a strong value stock based on various financial metrics [2][8]. Valuation Metrics - Evertec (EVTC) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential [4]. - The Forward P/E ratio for EVTC is 11.11, significantly lower than the industry average of 25.71, with a historical range between 9.59 and 14.36 [4]. - The PEG ratio for EVTC stands at 1.39, compared to the industry average of 1.71, with a historical range of 0.93 to 1.85 [5]. - The P/B ratio for EVTC is 4.53, which is favorable compared to the industry average of 8.95, with a historical range of 3.89 to 4.97 [6]. - The P/CF ratio for EVTC is 10.27, well below the industry average of 19.15, with a historical range of 9.22 to 15.38 [7]. Investment Outlook - The combination of favorable valuation metrics and a strong earnings outlook suggests that Evertec (EVTC) is currently undervalued, making it an attractive investment opportunity [8].

Financial Performance - Revenues for Q3 2024 reached $211.8 million, a 22.3% increase from $173.2 million in Q3 2023[14] - Net income for Q3 2024 was $25.2 million, compared to $10.0 million in Q3 2023, representing a 152.5% increase[14] - The company reported a net income attributable to common stockholders of $24.7 million for Q3 2024, compared to $10.0 million in Q3 2023[14] - The company reported a net income of $25,202,000 for the three months ended September 30, 2024, compared to $9,956,000 for the same period in 2023[109] - Net income for the nine months ended September 30, 2024, was $74,112, compared to $68,069 for the same period in 2023, representing an increase of 4.9%[18] - Adjusted net income for the nine months ended September 30, 2024 was $157.2 million, compared to $144.7 million for the same period in 2023[190] Operating Costs - Operating costs for Q3 2024 totaled $170.3 million, up from $133.6 million in Q3 2023, reflecting a 27.5% increase[14] - Total operating costs and expenses for the three months ended September 30, 2023, were $133,636,000, compared to $511,387,000 for the nine months ended September 30, 2024[104][107] - Operating costs and expenses for the nine months ended September 30, 2024, rose by 33% to $511.4 million, up from $385.7 million in the prior year[138] Cash and Assets - Cash and cash equivalents were $275.4 million as of September 30, 2024, down from $295.6 million at the end of 2023[11] - Total assets decreased to $1.89 billion as of September 30, 2024, down from $2.06 billion at the end of 2023[11] - The company’s cash, cash equivalents, and restricted cash at the end of the period totaled $326,282, compared to $215,546 at the end of the same period in 2023, reflecting a growth of 51.5%[18] - As of September 30, 2024, the company had cash and cash equivalents of $275.4 million, with $214.0 million held in subsidiaries outside of Puerto Rico[164] Shareholder Equity and Dividends - The company’s total stockholders' equity decreased to $502.6 million as of September 30, 2024, from $594.3 million at the end of 2023[11] - Cash dividends declared on common stock were $3,199,000, maintaining a rate of $0.05 per share[15] - The company declared quarterly cash dividends of $0.05 per share on February 15, April 18, and July 18, 2024, with payments made to stockholders on March 15, June 7, and September 6, 2024[93] Debt and Financing - Total liabilities decreased to $1.35 billion as of September 30, 2024, compared to $1.42 billion at the end of 2023[11] - The unpaid principal balance of the TLA Facility and TLB Facility at September 30, 2024, was $435.6 million and $540.0 million, respectively[41] - The Company prepaid $60 million of the outstanding balance on the TLB facility in the fourth quarter of 2023[40] - The Company has four interest rate swap agreements with a total notional amount of $600 million, converting variable interest payments to fixed rates[179] Revenue Segments - The company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Latin America Payments and Solutions, Merchant Acquiring, and Business Solutions, each contributing to overall revenue growth[95] - Payment Services - Puerto Rico & Caribbean segment revenues increased by $1.2 million to $52.8 million for the three months ended September 30, 2024, driven by growth from ATH Movil and increased POS transactions[153] - Latin America Payments and Solutions segment revenues rose by $29.9 million to $76.0 million for the three months ended September 30, 2024, benefiting from the Sinqia acquisition and organic growth[154] - Merchant Acquiring segment revenues increased by $4.9 million to $45.4 million for the three months ended September 30, 2024, primarily due to improved spread and sales volume growth[156] - Business Solutions segment revenues grew by $4.6 million to $61.1 million for the three months ended September 30, 2024, driven by completed projects[157] Tax and Compliance - The current tax provision for the three months ended September 30, 2024, was $8.7 million, compared to $8.2 million for the same period in 2023, reflecting an increase of approximately 6%[85] - The effective tax rate for the nine months ended September 30, 2024, was 4.0%, down from 6.3% in the comparable 2023 period[144] - The company estimates a potential decrease in uncertain tax liabilities by approximately $2.7 million in the next 12 months due to the expiration of the statute of limitations[89] Acquisitions and Growth - On October 31, 2024, the company acquired 100% of Grandata, Inc., enhancing its product offerings in data analytics[114] - The Sinqia acquisition contributed to revenue growth in Latin America, alongside better-than-expected volumes in the GetNet Chile relationship, resulting in a one-time revenue recognition of $1.8 million[132] - The ongoing shift from cash to electronic payments presents significant growth opportunities in Latin America and the Caribbean, where penetration remains lower than in the U.S.[126] Miscellaneous - The company processed over six billion transactions annually through its electronic payment networks in Puerto Rico and Latin America[118] - The company has increased its share repurchase authorization to allow for up to $220 million in stock repurchases by December 31, 2025[124] - The company recognized $22.4 million in share-based compensation expense for the nine months ended September 30, 2024, compared to $18.8 million for the same period in 2023[68]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was approximately $212 million, an increase of approximately 22% compared to Q3 2023 [7][18] - Adjusted EBITDA was approximately $87 million, an increase of approximately 11% year-over-year, with an adjusted EBITDA margin of 41.3%, which is approximately 420 basis points lower than the previous year but above expectations [7][19] - Adjusted earnings per share was $0.86, an increase of 8% from the prior year [7][19] - Year-to-date operating cash flow was $185 million, with approximately $92 million returned to shareholders through dividends and share repurchases [8] Business Line Data and Key Metrics Changes - In Puerto Rico, Merchant Acquiring revenue increased approximately 12% year-over-year, driven by higher sales volume and spreads [9][20] - Payments Puerto Rico revenue was up approximately 2%, influenced by growth in ATH Mobile and POS transactions [9][21] - Business Solutions segment revenue increased approximately 8%, attributed to projects with Popular that have gone into production [9][24] - LATAM segment revenue was up 65% year-over-year, primarily due to the Sinqia acquisition, with a one-time revenue from GetNet Chile impacting results [12][23] Market Data and Key Metrics Changes - The macroeconomic environment in Puerto Rico remains stable, with employment up 1.9% year-over-year and a low unemployment rate of 5.7% [10] - Travel and tourism trends in Puerto Rico are positive, with international airport arrivals up approximately 19% year-over-year [10] Company Strategy and Development Direction - The company has closed the acquisition of Grandata, enhancing its product offerings and relationships with key fintechs in Latin America [14] - Cost efficiency initiatives are being executed to offset the anticipated impact of a 10% discount on certain MSA services starting in October 2025 [11][32] - The company aims to maintain competitive pricing and drive business growth despite the upcoming discount [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects in both LATAM and Puerto Rico, despite facing currency headwinds [28][34] - The company expects revenue growth of approximately 21% to 22% year-over-year for 2024, with adjusted EBITDA margin expectations between 39.5% to 40% [28][31] - Management highlighted the importance of ongoing modernization and re-pricing initiatives to enhance margins and revenue growth in the Sinqia segment [40][49] Other Important Information - The company has a strong liquidity position with approximately $469 million as of September 30 [8][27] - The company has committed to a scholarship program in Puerto Rico and Latin America, awarding approximately $1.4 million over ten years [15] Q&A Session Summary Question: Insights on pricing power and volume trends - Management noted that pricing initiatives have been implemented, but some will anniversary in Q4, and volumes have remained consistent without significant acceleration [36][37] Question: Details on the Grandata acquisition - Grandata specializes in leveraging behavioral data for credit risk insights, particularly in Mexico and Brazil, and complements the company's existing issuing platform [39] Question: Update on Sinqia's performance - Management highlighted three focus areas: re-pricing contracts, modernizing platforms, and margin optimization, which are expected to drive growth and improve margins [40][49] Question: Cost initiatives to offset MSA contract changes - The company has identified cost-cutting measures to offset the anticipated $18 million impact from the MSA contract changes, ensuring margin stability [42][52] Question: Client attrition in LATAM - Management acknowledged some client attrition due to regulatory changes and other factors but remains optimistic about growth driven by Sinqia and Grandata [58] Question: Capital allocation strategy - The company plans to be opportunistic with share repurchases, maintaining flexibility in capital deployment strategies [60]

Core Insights - Evertec reported revenue of $211.8 million for the quarter ended September 2024, reflecting a year-over-year increase of 22.3% [1] - The company's EPS was $0.86, up from $0.80 in the same quarter last year, exceeding the consensus EPS estimate of $0.73 by 17.81% [1] Revenue Performance - Payment Services - Puerto Rico & Caribbean generated $52.76 million, slightly below the estimated $53.58 million, marking a year-over-year increase of 2.2% [3] - Payment Services - Latin America reported $76.03 million, significantly above the previous year's figure, with a year-over-year growth of 64.7%, although it fell short of the $79.49 million estimate [3] - Merchant acquiring, net revenues reached $45.44 million, surpassing the average estimate of $43.53 million, representing a 12% increase year over year [3] - Business solutions revenues were $61.10 million, exceeding the estimated $57.73 million, with an 8.1% year-over-year growth [3] - Corporate and Other segment reported -$23.53 million, in line with estimates, showing an 8.8% improvement compared to the previous year [3] Stock Performance - Over the past month, Evertec's shares have declined by 2.9%, contrasting with a 0.7% increase in the Zacks S&P 500 composite [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

Evertec (EVTC) came out with quarterly earnings of $0.86 per share, beating the Zacks Consensus Estimate of $0.73 per share. This compares to earnings of $0.80 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 17.81%. A quarter ago, it was expected that this payment processing company would post earnings of $0.69 per share when it actually produced earnings of $0.83, delivering a surprise of 20.29%.Over the last four quarters, t ...

Exhibit 99.1 EVERTEC REPORTS THIRD QUARTER 2024 RESULTS Announces acquisition of Grandata SAN JUAN, PUERTO RICO - November 6, 2024 - EVERTEC, Inc. (NYSE: EVTC) ("Evertec", the "Company", "we" or "our") today announced results for the third quarter ended September 30, 2024. Third Quarter 2024 Highlights • Revenue increased 22% to $211.8 million • GAAP Net Income attributable to common shareholders increased 146% to $24.7 million and increased 153% to $0.38 per diluted share • Adjusted EBITDA increased 11% to ...

Investors looking for stocks in the Financial Transaction Services sector might want to consider either Evertec (EVTC) or Equifax (EFX) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look. There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that ...

Investors with an interest in Financial Transaction Services stocks have likely encountered both Evertec (EVTC) and Equifax (EFX) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look. We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style ...

Investors interested in Financial Transaction Services stocks are likely familiar with Evertec (EVTC) and Equifax (EFX) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look. There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimat ...