EVTC: Latin American Expansion And Brazil Integrations Will Drive Future Upside

Analysts have trimmed their price target on EVERTEC by $5, reducing it to $29 from $34, citing a more measured outlook despite ongoing encouragement from the company’s expanding Latin American operations and recent acquisitions in Brazil.

Analyst Commentary

Analysts describe their stance as balanced, acknowledging both the upside potential from EVERTEC’s Latin American expansion and the execution and integration risks that justify a reduced valuation multiple.

Bullish Takeaways

• Bullish analysts point to the strong performance of the Latin American segment as a key driver of medium term revenue growth and potential margin expansion.
• Recent acquisitions in Brazil, including Sinqia and Tecnobank, are viewed as strategically important for deepening EVERTEC’s presence in higher growth markets and broadening its product offering.
• Smaller tuck in M&A activity is seen as supportive of a scalable platform, which could enhance operating leverage and justify multiple expansion if integration is executed effectively.
• The diversified geographic mix reduces reliance on Puerto Rico and other mature markets, supporting a more resilient growth profile over time.

Bearish Takeaways

• Bearish analysts remain cautious that the integration of multiple acquisitions, particularly in Brazil, could weigh on near term profitability and delay synergies, which may pressure valuation.
• There is concern that competitive dynamics in key Latin American markets could limit pricing power and temper the pace of revenue growth embedded in prior targets.
• Execution risk around scaling new platforms and regulatory complexity across jurisdictions contributes to a more conservative outlook for both earnings visibility and cash flow.
• The trimmed price target reflects a view that, while the growth story is intact, the risk reward profile has normalized and now warrants a more measured stance on multiple expansion.

What's in the News

• Raised full year 2025 revenue guidance to a range of $921 million to $927 million, implying 8.9% to 9.6% reported growth and 10.0% to 11.0% constant currency growth, with GAAP EPS now expected between $2.27 and $2.32 per share (Key Developments).
• Announced leadership changes effective November 1, 2025, with long time finance executive Joaquin Castrillo transitioning from Chief Financial Officer to Senior Executive Vice President and Chief Operating Officer (Key Developments).
• Named Karla Cruz Jusino, currently Senior Vice President and Chief Accounting Officer, as the new Chief Financial Officer, expanding her oversight to include finance, accounting, treasury, tax, and investor relations (Key Developments).

Valuation Changes

• Fair Value Estimate: unchanged at $32.80, indicating no revision to the intrinsic valuation underpinning the new price target.
• Discount Rate: effectively unchanged at 8.47%, a negligible move that has minimal impact on the discounted cash flow analysis.
• Revenue Growth: effectively unchanged at approximately 6.08%, suggesting no material shift in long term top line expectations.
• Net Profit Margin: essentially flat at about 17.87%, reflecting stable assumptions for long term profitability.
• Future P/E Multiple: effectively unchanged at 14.12x, indicating no meaningful adjustment in the valuation multiple applied to forward earnings.