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Evertec (EVTC)
NYSE:EVTC
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Evertec (EVTC) AI Stock Analysis

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EVTC

Evertec

(NYSE:EVTC)

Rating:76Outperform
Price Target:
$41.00
▲(23.01%Upside)
Evertec's strong financial performance and positive earnings call outlook are the primary drivers of the stock score. While the technical indicators suggest a neutral to slightly bearish trend, the valuation is fair. The company's strong revenue growth and profitability trends outweigh the leverage and external challenges highlighted.
Positive Factors
Financial Performance
Evertec reported solid results with revenue and adjusted EBITDA ahead of estimates.
Market Expansion
There is room for multiple expansion as the business mix evolves to faster-growing markets outside Puerto Rico.
Mergers and Acquisitions
Evertec cleared restrictions related to the Bank Holding Company Act, enabling more aggressive M&A to diversify outside Puerto Rico into faster-growing markets.
Negative Factors
Cost Pressures
These pressures are weighing - e.g., $18 mln on BPOP alone into 2026.
Margin Compression
The downgrade of EVTC was anchored on prospective margin compression primarily from the downside leverage from the LatAm expansion and the BPOP renewal.
Revenue Headwinds
Management expressed confidence in various cost initiatives to mitigate the upcoming revenue headwind related to the renegotiated contract with Popular.

Evertec (EVTC) vs. SPDR S&P 500 ETF (SPY)

Evertec Business Overview & Revenue Model

Company DescriptionEVERTEC, Inc. engages in transaction processing business in Latin America and the Caribbean. The company operates through Payment Services - Puerto Rico & Caribbean; Payment Services - Latin America; Merchant Acquiring; Business Solutions, and Corporate and Other segments. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. The company also offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers; and EBT services. In addition, it provides business process management solutions comprising core bank processing, network hosting and management, IT consulting, business process outsourcing, item and cash processing, and fulfillment solutions to financial institutions, and corporate and government customers. Further, the company owns and operates the ATH network, an automated teller machine and personal identification number debit networks. It manages a system of electronic payment networks that process approximately three billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.
How the Company Makes MoneyEvertec generates revenue primarily through its three main business segments: Merchant Acquiring, Payment Processing, and Business Solutions. In the Merchant Acquiring segment, Evertec earns fees by facilitating electronic transactions between merchants and consumers, often taking a small percentage of each transaction processed. The Payment Processing segment involves providing financial institutions with the infrastructure and services needed to process electronic payments, for which Evertec charges service fees. In the Business Solutions segment, Evertec offers a variety of technology and outsourcing services that include network and system management, and business process automation, earning revenue through service contracts. Additionally, partnerships with banks and financial institutions enhance its service offerings, contributing significantly to its earnings.

Evertec Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -3.56%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong start to 2025 for EVERTEC, with notable revenue growth, improved margins, and positive performance across segments, particularly in Latin America. However, challenges such as currency headwinds, attrition from key clients like MercadoLibre, and potential macroeconomic impacts from tariffs were also highlighted.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
EVERTEC reported revenue of $228.8 million for Q1 2025, an 11.4% increase over the prior year, with constant currency revenue growth at 15%.
Adjusted EBITDA and Margin Improvement
Adjusted EBITDA was $89.4 million, up 14% year-over-year, with a margin increase of 100 basis points to 39.1%.
Adjusted EPS Growth
Adjusted EPS increased by 21% year-over-year to $0.87, driven by strong EBITDA growth, lower interest expense, and reduced share count.
Robust Performance in Latin America
LatAm revenue grew 13% year-over-year or 22% in constant currency, with strong contributions from the GetNet Chile relationship and the reacceleration of the Brazil business.
Improved 2025 Outlook
EVERTEC raised its constant currency revenue growth expectations for 2025 to 6.8%-7.7%, up from 5.5%-6.7%.
Merchant Acquiring Segment Success
Net revenue increased 11% year-over-year to $47.6 million, with a significant margin increase of 510 basis points to 42.7%.
Financial Stability
Strong liquidity with approximately $460 million as of March 31 and a net debt to trailing 12-month adjusted EBITDA of approximately 2.04x.
Negative Updates
Currency Headwinds
Currency fluctuations posed a headwind of approximately 3.3% for the quarter, mainly due to the Brazilian real.
Challenges in Business Solutions Margin
Business Solutions segment saw a 4% decrease in adjusted EBITDA and a margin decline of 580 basis points due to revenue mix shift towards lower margin hardware and software sales.
MercadoLibre Attrition Impact
The loss of the MercadoLibre account is expected to impact revenue from Q2 onwards, with notable attrition expected in Latin America.
Potential Impact of Tariffs
Concerns over tariffs affecting customer confidence and economic conditions in countries like Brazil and Chile, which could disrupt payment volumes.
Company Guidance
During the EVERTEC First Quarter 2025 Earnings Call, management provided a strong outlook for the year despite macroeconomic uncertainties. Key financial metrics were highlighted, including a quarterly revenue of $228.8 million, marking an 11.4% increase year-over-year, with currency headwinds of approximately 3.3%. Adjusted EBITDA grew by 14% to $89.4 million, with a margin of 39.1%, up 100 basis points. Adjusted EPS rose by 21% to $0.87, supported by adjusted EBITDA growth and lower interest expenses. The company generated $37.6 million in operating cash flows and returned $3.2 million to shareholders through dividends. EVERTEC's liquidity was reported at $460 million as of March 31, 2025, and net debt stood at $704 million, with a leverage ratio of approximately 2.04x. For 2025, the company anticipates constant currency revenue growth of 6.8% to 7.7% and adjusted EPS growth of 4.9% to 7.6%, with an expected adjusted EBITDA margin between 39.5% and 40.5%.

Evertec Financial Statement Overview

Summary
Evertec demonstrates strong overall financial performance with robust revenue growth and healthy profitability margins. The company has effective cost management and strong cash flow generation, although the balance sheet reflects a leveraged position. The strong profitability and cash flow trends mitigate leverage concerns.
Income Statement
85
Very Positive
Evertec's income statement reveals robust revenue growth with a 4.4% increase over the last year as per TTM data. Gross profit margin stands at a solid 48.0%, indicating healthy profitability. The net profit margin improved to 14.9%, demonstrating effective cost management. EBIT and EBITDA margins of 21.0% and 34.0% respectively reflect strong operational efficiency.
Balance Sheet
78
Positive
The balance sheet shows a moderate debt-to-equity ratio of 1.76, which indicates a leveraged position. However, return on equity has improved to 23.9%, showing effective use of equity to generate profits. The equity ratio is 28.3%, suggesting a reasonable equity cushion against liabilities.
Cash Flow
82
Very Positive
Evertec demonstrates strong cash flow management with a free cash flow to net income ratio of 1.51, indicating significant cash generation capability. Operating cash flow to net income ratio is 2.02, further highlighting efficient cash operations. Free cash flow growth rate of 13.7% underlines a positive cash flow trajectory.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue845.49M694.71M618.41M589.80M510.59M
Gross Profit439.07M357.95M325.79M339.63M283.72M
EBITDA337.37M211.29M374.35M278.38M221.26M
Net Income112.62M79.72M239.01M161.13M104.44M
Balance Sheet
Total Assets1.86B2.06B1.13B1.14B1.07B
Cash, Cash Equivalents and Short-Term Investments273.64M295.60M197.23M266.35M202.65M
Total Debt966.58M986.41M446.97M486.57M523.52M
Total Liabilities1.34B1.42B657.00M674.49M730.15M
Stockholders Equity472.52M594.29M471.51M466.21M337.74M
Cash Flow
Free Cash Flow171.63M139.31M140.83M161.51M150.45M
Operating Cash Flow260.06M224.29M223.36M228.42M199.09M
Investing Cash Flow-118.28M-507.93M-133.32M-83.82M-48.63M
Financing Cash Flow-152.56M403.27M-156.77M-81.28M-62.62M

Evertec Technical Analysis

Technical Analysis Sentiment
Negative
Last Price33.33
Price Trends
50DMA
35.98
Negative
100DMA
35.60
Negative
200DMA
34.72
Negative
Market Momentum
MACD
-0.82
Positive
RSI
36.24
Neutral
STOCH
27.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVTC, the sentiment is Negative. The current price of 33.33 is below the 20-day moving average (MA) of 34.87, below the 50-day MA of 35.98, and below the 200-day MA of 34.72, indicating a bearish trend. The MACD of -0.82 indicates Positive momentum. The RSI at 36.24 is Neutral, neither overbought nor oversold. The STOCH value of 27.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EVTC.

Evertec Risk Analysis

Evertec disclosed 43 risk factors in its most recent earnings report. Evertec reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Evertec Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$3.09B23.9826.10%
76
Outperform
$2.12B16.6024.65%0.60%17.39%100.46%
71
Outperform
$2.43B22.7815.97%14.86%-0.94%
68
Neutral
¥234.20B14.887.50%2.60%9.27%5.76%
68
Neutral
$2.73B57.735.01%-8.44%
64
Neutral
$2.64B6.5214.36%0.20%2.38%9.88%
55
Neutral
$3.62B8.73-8.85%-14.03%-167.03%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EVTC
Evertec
33.33
-0.86
-2.52%
PAGS
Pagseguro Digital
8.16
-4.52
-35.65%
STNE
Stoneco
13.38
-0.03
-0.22%
PAYO
Payoneer
6.81
1.35
24.73%
MQ
Marqeta
5.79
0.47
8.83%
DLO
DLocal
10.83
3.39
45.56%

Evertec Corporate Events

Dividends
Evertec Declares Quarterly Cash Dividend Announcement
Neutral
Jul 24, 2025

On July 24, 2025, EVERTEC, Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.05 per share, to be paid on September 5, 2025, to stockholders of record as of August 4, 2025. The Board anticipates maintaining this dividend in future quarters, though future declarations will depend on Board approval and may change based on business needs or market conditions.

The most recent analyst rating on (EVTC) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on Evertec stock, see the EVTC Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Evertec Stockholders Approve Key Proposals at Annual Meeting
Neutral
May 28, 2025

On May 22, 2025, Evertec, Inc. held its Annual Meeting of Stockholders, where stockholders approved three proposals. These included the election of directors, an advisory vote on executive compensation, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. The meeting saw participation from holders of 60,531,533 shares, constituting a quorum.

The most recent analyst rating on (EVTC) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on Evertec stock, see the EVTC Stock Forecast page.

Dividends
Evertec Declares Quarterly Dividend for Shareholders
Neutral
May 2, 2025

On May 2, 2025, EVERTEC, Inc.’s Board of Directors declared a regular quarterly cash dividend of $0.05 per share, to be paid on June 6, 2025, to stockholders of record as of May 13, 2025. The Board anticipates continuing this dividend in future quarters, although future declarations are subject to approval and may change based on business needs or market conditions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 10, 2025