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Evertec (EVTC)

EVERTEC, Inc. is a leading full-service transaction processing business in Puerto Rico, the Caribbean, and Latin America providing a broad range of merchant acquiring, payment processing and business solutions services. The Company manages a system of electronic payment networks that process more than two billion transactions annually and offers a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. In addition, Evertec owns and operates the ATH® network, one of the leading personal identification number (“PIN”) debit networks in Latin America. Based in Puerto Rico, the Company operates in 26 Latin American countries and serves a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions.

Company profile

Ticker
EVTC
Exchange
CEO
Peter Harrington
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
EVERTEC Intermediate Holdings, LLC • EVERTEC Group, LLC • EVERTEC Guatemala, S.A. • EVERTEC Panama, S.A. • EVERTEC Dominicana, SAS • EVERTEC Costa Rica, S.A. • Evertec Colombia, SAS • EVERTEC USA, LLC • EVERTEC Mexico • Evertec PlacetoPay, S.A.S. ...
IRS number
660783622

EVTC stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$38.00
Low target
$31.00
High target
$45.00
Morgan Stanley
Maintains
Underweight
$31.00
8 Aug 22
Raymond James
Maintains
Outperform
$45.00
8 Aug 22

Calendar

5 Aug 22
1 Oct 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
15 Aug 22 Popular Common Stock Sell Dispose S No No 31.12 803,341 25M 0
15 Aug 22 Popular Common Stock Sell Dispose S No No 31.12 6,262,293 194.88M 803,341
5 Aug 22 Paola Perez-Surillo Common Stock Grant Acquire A No No 0 13,561 0 34,248
5 Aug 22 Luis A Rodriguez-Gonzalez Common Stock Grant Acquire A No No 0 8,814 0 38,834
1 Jul 22 Popular Common Stock Other Dispose J No No 10.75 4,589,169 49.33M 7,065,634
13F holders Current Prev Q Change
Total holders 232 239 -2.9%
Opened positions 31 30 +3.3%
Closed positions 38 41 -7.3%
Increased positions 79 91 -13.2%
Reduced positions 82 87 -5.7%
13F shares Current Prev Q Change
Total value 2.31B 2.62B -11.9%
Total shares 61.42M 62.01M -1.0%
Total puts 4.8K 0 NEW
Total calls 0 0
Total put/call ratio Infinity
Largest owners Shares Value Change
BLK Blackrock 9.22M $340.05M -0.7%
Vanguard 7.6M $280.22M +0.5%
Kayne Anderson Rudnick Investment Management 4.91M $180.92M -4.2%
American Century Companies 3.78M $139.44M +5.5%
American Century Investment Management 3.65M $182.43M 0.0%
Capital International Investors 3.56M $131.06M +2.4%
Boston Partners 3.16M $116.88M +2.2%
STT State Street 2.07M $76.17M +0.4%
Dimensional Fund Advisors 1.56M $57.62M +2.0%
Renaissance Technologies 1.26M $46.42M -4.0%
Largest transactions Shares Bought/sold Change
Fuller & Thaler Asset Management 611.26K -461.28K -43.0%
MNGPF Man 0 -415.37K EXIT
GS Goldman Sachs 300.56K -338.08K -52.9%
Parametric Portfolio Associates 0 -238.33K EXIT
MS Morgan Stanley 534.9K +217.56K +68.6%
Kayne Anderson Rudnick Investment Management 4.91M -214.45K -4.2%
AMP Ameriprise Financial 503.74K +198.97K +65.3%
American Century Companies 3.78M +198.76K +5.5%
Lombard Odier Asset Management 150K +150K NEW
Capital International Sarl 0 -113.74K EXIT

Financial report summary

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Risks
  • Our services to Popular account for a significant portion of our revenues, and we expect that our services to Popular will continue to represent a significant portion of our revenues for the foreseeable future.
  • If we are unable to maintain our merchant relationships and our alliance with Popular, our business may be materially adversely affected.
  • If we are unable to renew or negotiate extensions for our MSA with Popular, our ISO Agreement with Banco Popular and our ATH Network Participation Agreement and ATH Support Agreement with Banco Popular (the “BPPR ATH Agreements"), or if we are required to provide significant concessions to Popular or Banco Popular to secure extensions or otherwise, our ability to renegotiate our debt, results of operations, financial condition and trading price of our common stock may be materially adversely affected.
  • The inability to renew or maintain client contracts on favorable terms or at all may materially adversely affect our results of operations and financial condition.
  • We rely on our systems, employees and certain suppliers and counterparties, and certain failures could materially adversely affect our operations.
  • The ongoing COVID-19 pandemic has had, and may continue to have, a negative impact on the global economy and may have a negative impact on our business, operations, and results.
  • We are subject to security breaches or other confidential data theft from our systems, which can adversely affect our reputation and business.
  • We are subject to the credit risk that our merchants will be unable to satisfy obligations for which we may also be liable.
  • The ability to adopt technology to changing industry and customer needs or trends may affect our competitiveness or demand for our products, which may adversely affect our operating results.
  • Consolidations in the banking and financial services industry could adversely affect our revenues by eliminating existing or potential clients and making us more dependent on a more limited number of clients.
  • There may be a change in the use of cards as a payment mechanism or adverse developments with respect to card industry in general.
  • Changes in credit card association or other network rules or standards could adversely affect our business.
  • Changes in interchange fees charged by credit card associations and debit networks could increase our costs or otherwise materially adversely affect our business.
  • We are subject to extensive government regulation and oversight. Failure to comply with existing and future rules and regulations in the jurisdictions in which we operate could materially adversely affect the operations of one or more of our businesses in those jurisdictions.
  • Puerto Rico's fiscal crisis could have a material adverse effect on our business and the trading price of our common stock.
  • A protracted government shutdown could negatively affect our financial condition
  • Puerto Rico's economy, including its financial crisis and the effects of potential natural disasters, could have a prolonged negative impact on the countries in which we operate and a material adverse effect on our business and results of operations.
  • We are exposed to risks associated with our presence in international markets, including political or economic instability.
  • Failure to protect our intellectual property rights and defend ourselves from potential intellectual property infringement claims may diminish our competitive advantages or restrict us from delivering our services, which could result in a material and adverse impact on our business operations.
  • If EVERTEC Group does not comply with the terms of its preferential tax exemption grant, it may be subject to reduction of the benefits of the grant, tax penalties, other payment obligations or full revocation of the grant, which could have a material adverse effect on our financial condition, results of operations and our stock price.
  • Future sales or the possibility of future sales of a substantial amount of our common stock may depress the price of shares of our common stock
  • We are a holding company and rely on dividends and other payments, advances, and transfers of funds from our subsidiaries to meet our obligations and pay any dividends.
  • The interests of Popular may conflict with or differ from your interests as a stockholder.
  • Our organizational documents and Stockholder Agreement may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.
  • Our substantial leverage could adversely affect our ability to raise additional capital, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk and prevent us from meeting our obligations with respect to our substantial indebtedness, and we and our subsidiaries may be able to incur significant additional indebtedness, which could further increase such risks.
  • If we are unable to comply with covenants in our debt instruments that limit our flexibility in operating our business or obligate us to take action such as deliver financial reports, we may default under our debt instruments and our indebtedness may become due.
  • Discontinuation, reform or replacement of LIBOR and other benchmark rates, or uncertainty related to the potential for any of the foregoing, may adversely affect our business.
Management Discussion
  • Total revenues for the quarter ended June 30, 2022 were $160.6 million, an increase of 8% compared with $149.1 million in the prior year. Revenue in Puerto Rico benefited from increased payment transaction volumes in addition to continued growth in the Company's digital solutions, ATH Movil and ATH Business, as well as revenue generated from an acquisition completed at the beginning of the quarter. Revenue in the quarter also benefited from the printing contract entered into in June 2021, one-time software sales and the year over year CPI escalator on the MSA with Popular. Latin America revenue reflected organic growth.
  • Cost of revenues for the three months ended June 30, 2022 amounted to $74.3 million, an increase of $14.9 million or 25% when compared to the same period in the prior year. The increase in cost of revenues includes a $4.1 million impairment loss related to a multi-year software development recorded during the quarter, as well as an increase in personnel costs, mainly due to increased headcount in Latin America, an increase in professional fees, higher equipment expenses for cloud services as utilization continues to grow and an increase in provisions for expected losses.
  • Selling, general and administrative expenses for the three months ended June 30, 2022 amounted to $20.1 million, an increase of $3.3 million or 20% when compared to the same period in the prior year driven by an increase in professional fees related to corporate transactions and increased personnel costs.

Content analysis

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Positive
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Uncertain
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Legalese
Litigous
Readability
H.S. junior Avg
New words: BBR, cap, CLP, converting, deposit, designate, extent, footprint, influence, lesser, merit, modification, Peru, pressure, recession, renegotiation, representation, retroactive, Santiago, stockholder, terminate, terminated, treated, underlying, unissued, wholly
Removed: outbreak, response, vary