Should Investors Transfer Their Money Into Small Cap Euronet Worldwide (EEFT)? MGI, XOOM & WU

Small cap money transfer stock Euronet Worldwide, Inc (NASDAQ: EEFT) and Wal-Mart Stores, Inc (NYSE: WMT) have announced an exclusive money transfer service called "Walmart-2-Walmart," meaning its time to take a closer look at the stock along with the performance of peers like Moneygram International Inc (NASDAQ: MGI), Xoom Corp (NASDAQ: XOOM) and The Western Union Company (NYSE: WU) which fell 17.68%, 4.32% and 4.98%, respectively.

What is Euronet Worldwide, Inc?

Founded in 1994, small cap Euronet Worldwide is a global provider of electronic payment and transaction processing solutions for financial institutions, retailers, service providers and individual consumers. Euronet Worldwide's three primary business segments (EFT, epay and Ria Money Transfer) are supported by 4,100 employees in 39 countries while last year, the company processed 2.3 billion transactions and posted annual revenues of approximately $1.4 billion. In addition, the company is operating the largest independent nationwide shared ATM network in India and the largest payment network in the world for prepaid mobile top-up.

As for potential peers, small cap Moneygram International offers money transfer services worldwide through a global network of 336,000 agent locations (including retailers, international post offices and financial institutions) in more than 200 countries and territories; small cap Xoom Corp is a leading digital money transfer provider in 31 countries (with more than one million active customers sent more than $5.5 billion to family and friends last year) that is focused on helping consumers send money using their mobile phone, tablet or computer; mid cap The Western Union Company with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, has a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs that last year handled 242 million consumer-to-consumer transactions worldwide - moving $82 billion of principal between consumers and 459 million business payments.

What You Need to Know or Be Warned About Euronet Worldwide, Inc

On Thursday morning, Euronet Worldwide issued a filing to announce Walmart-2-Walmart - a domestic consumer to consumer money transfer service that will be offered at US based Walmart stores using the company's money transfer subsidiary, Ria Financial Services. Specifically, Ria will be the exclusive operator for all Walmart-2-Walmart transactions and Walmart will act as Ria's authorized agent. In a call with investors, Daniel Eckert, the senior vice president of services for Walmart, commented:

"Walmart-2-Walmart offers a clear fee structure with just two pricing tiers: customers can transfer up to $50 for $4.50 and up to $900 for $9.50."

Wells Fargo was quick to note Moneygram International has stated that 13% of its gross revenue and 9% of its revenue net of commissions is obtained through its Wal-Mart-2-Wal-Mart money transfer business. Nevertheless, Wells Fargo said MoneyGram remains "very attractive" with no more than 13% of the company's revenue at risk plus they kept Outperform ratings on both MoneyGram and Euronet Worldwide.

Investors though should be aware that Euronet Worldwide plunged around 15% back in February after earnings missed expectations when fourth quarter revenues rose 7% to $375.4 million and net income attributable to Euronet came in at $10.0 million verses a net loss of $13.0 million. For the entire year, Euronet Worldwide had an 11% revenue increase to $1,413.1 million and net income attributable to Euronet of $88.0 million verses $20.5 million.

Otherwise, it should be noted that Euronet Worldwide has a trailing P/E of 25.11 and a forward P/E of 15.43 along with no dividend. The company will also release first quarter 2014 earnings results prior to the market opening on Wednesday, April 30.

Share Performance: Euronet Worldwide, Inc vs. MGI, XOOM & WU

On Thursday, small cap Euronet Worldwide rose 4.05% to $42.44 (EEFT has a 52 week trading range of $25.91 to $50.00 a share) for a market cap of $2.16 billion plus the stock is down 12.5% since the start of the year, up 58.9% over the past year and up 172.7% over the past five years. Here is a look at the long term performance of Euronet Worldwide along with peers Moneygram International, Xoom Corp and The Western Union Company:

As you can see from the above chart, Euronet Worldwide's performance was relatively flat until the beginning of last year while Xoom Corp has not been a good deal for retail investors since its IPO and both The Western Union Company and Moneygram International have been flat for investors since the end of the financial crisis or so.

Finally, here is a look at the latest technical charts for all four stocks:

The Bottom Line. Given the Walmart-2-Walmart deal, investors should be revisiting small cap Euronet Worldwide but they probably should not rule out taking a closer look at Moneygram International, Xoom Corp and Western Union Company now that their shares are available for a discount.