Why QIWI PLC Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of QIWI PLC jumped more than 12% during Tuesday's intraday trading after the Russia-based payment services provider reported solid third-quarter results.
So what: Quarterly adjusted net revenue rose 49% year-over-year to $50.2 million, which translated to adjusted net profit growth of 46% to $18.7 million, or $0.36 per share. Analysts, on average, were looking for adjusted earnings of just $0.25 per share on sales of $40.55 million.
In addition, QIWI raised its full-year 2013 guidance and now expects adjusted net revenue to increase by 42% to 45% over 2012, or above its previous range of 27% to 30%. Better yet, adjusted net profit is expected to rise 50% to 55% over the same period, also above QIWI's previous range of 35% to 40% growth.
Now what: It's evident QIWI remains nicely positioned to benefit from the growing trend of electronic payments in Russia and the CIS, especially as active Visa QIWI Wallet accounts increased 53% year over year in the most recent quarter to 15 million, while payment volume from the product jumped 63% to $2.0 billion.
As it stands, shares may look expensive on the surface trading around 48 times trailing earnings and 30 times next year's estimates, but I see no reason QIWI shouldn't be able to maintain its torrid pace of growth going forward. That's why, even after today's pop, I think QIWI stock could still prove a bargain for patient shareholders down the road.
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Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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