Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Here's Why You Should Hold on to Global Payments (GPN) Stock

By Zacks Investment ResearchStock MarketsAug 29, 2021 10:07PM ET
www.investing.com/analysis/heres-why-you-should-hold-on-to-global-payments-gpn-stock-200600410
Here's Why You Should Hold on to Global Payments (GPN) Stock
By Zacks Investment Research   |  Aug 29, 2021 10:07PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Global Payments (NYSE:GPN) Inc. GPN is well-poised for growth on the back of improved revenues, acquisition of Total System Services (NYSE:TSS) (“TSYS”) along with other buyouts and collaborations, and sound capital position. A solid 2021 guidance reinforces the stock’s growth prospects.

Zacks Rank & Price Performance

Global Payments carries a Zacks Rank #3 (Hold), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has lost 7% in a year compared with the industry’s and Business Services sector’s decline of 9.4% and 22.1%, respectively.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Style Score

The company is positioned well for progress, as evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.

It has an impressive Momentum Score of A, which reflects the short-term attractiveness of the stock.

Robust Prospects

The Zacks Consensus Estimate for the company’s 2021 earnings indicate growth of 27.5% from the prior-year’s reported figure. The consensus mark for 2021 revenues suggests improvement of 14.4% from the year-ago reported figure.

Positive Estimate Revision

The Zacks Consensus Estimate for 2021 earnings has been moved north by 1.6% in the past 30 days.

Impressive Earnings Surprise History

Global Payments outpaced earnings estimates in each of the trailing four quarters, the average surprise being 4.02%.

Valuation

Price-to-earnings (P/E) is one of the multiples used for valuing financial transaction services stocks. Compared with the financial transaction services’ industry trailing 12-month P/E ratio of 32.1, Global Payments has a reading of 23.3. It is quite evident that the stock is currently undervalued.

Solid 2021 Guidance

Concurrent with second-quarter results, Global Payments upped its 2021 business outlook. Adjusted net revenues are anticipated between $7.70 billion and $7.73 billion, higher than the prior view of $7.550-$7.625 billion. The revised guidance indicates improvement of 14-15% from the 2020-end reported figure. The mid-point of the new guidance lies in line with the Zacks Consensus Estimate of $7.72 billion.

Adjusted diluted earnings per share is projected within $8.07-$8.20, up from the prior outlook of $7.87-$8.07. The new guidance suggests growth of 26-28% from the reported figure at 2020 end. The mid-point of the same lies lower than the consensus mark of $8.16 per share.

Other financial transaction services stocks such as Envestnet (NYSE:ENV), Inc. ENV, Equifax Inc (NYSE:EFX). EFX and FLEETCOR Technologies, Inc. FLT have hiked their earnings guidance for 2021 as well.

Business Tailwinds

The company’s revenues have been gaining on the back of strong performances across Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions units. Time and again, it has been acquiring and joining forces with several financial institutions to roll out innovative payment solutions and bolster geographical presence. Several contract wins and renewals have strengthened partners’ and customers’ trust on the company’s capabilities.

Global Payments’ acquisition of TSYS is a crucial deal. It has provided the much-needed scale to the company’s business and enabled it to foray across several new markets. The merger-related synergies stemming from TSYS buyout are expected to result in cost savings and thereby benefit the bottom line. The company continues to anticipate annual run rate expense synergies of at least $400 million by September 2022, which marks the third year of closing of TSYS merger. Besides, it has made continued investments in technology aimed at capitalizing on sound prospects in the digital payments space.

Global Payments boasts of a strong cash balance and robust cash generating abilities, which have enabled it to undertake numerous growth-linked initiatives and prudently deploy capital. Recently, management approved a 28.2% hike in the quarterly dividend. Its leverage ratio of 27.7% at the second-quarter end remained lower than the industry’s figure of 37.9%.


Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Equifax, Inc. (EFX): Free Stock Analysis Report

Global Payments Inc. (GPN): Free Stock Analysis Report

Envestnet, Inc (ENV): Free Stock Analysis Report

FleetCor Technologies, Inc. (FLT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research
Here's Why You Should Hold on to Global Payments (GPN) Stock
 

Related Articles

Here's Why You Should Hold on to Global Payments (GPN) Stock

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email