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Global Payments
NYSE:GPN Community
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Global Payments
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Global Payments
MA
Maxell
Community Contributor
Global Payments will reach new heights with a 34% upside potential
EXECUTIVE SUMMARY 12-Month Price Target: $142 Current Price: $105.71 Implied Upside: 34.3% Rating: STRONG BUY Risk Assessment: MODERATE INVESTMENT THESIS Global Payments (GPN) presents a compelling investment opportunity at current levels, with three key catalysts driving potential outperformance in 2025: Q4 2024 momentum in Merchant Solutions with strong POS adoption (added ~3,000 new locations) Strategic sale of AdvancedMD for $1.125 billion at attractive multiple with $700M earmarked for shareholder returns Successful integration of EVO Payments enhancing B2B capabilities and geographic reach VALUATION METHODOLOGY Our $142 price target reflects: Forward P/E multiple of 13x (below historical average, reflecting current market dynamics) applied to our 2025 EPS estimate of $10.92 EV/EBITDA multiple of 11x on projected 2025 EBITDA, reflecting recent sector compression DCF analysis using 9.5% WACC (adjusted for higher rate environment) and 3% terminal growth KEY GROWTH DRIVERS Recent Performance Highlights Q3 2024 adjusted net revenue increased 6% to $2.36 billion Adjusted operating margin expanded 40 basis points to 46.1% Added 92 new software partners in Q3, up 60% year-over-year Macro Environment U.S. GDP growth projected at 2.4% for 2025, supporting payment volumes Fed funds rate expected to decrease to 3.88%, reducing funding costs Resilient high-income consumer spending evidenced by recent holiday data RISK FACTORS Near-term margin pressure from technology investments and compensation costs Integration execution risk from recent acquisitions Increasing competition in digital payments space Potential policy changes under new administration FINANCIAL METRICS Key Financial Metrics for Q4 2024E: Revenue Growth: 5-6% Operating Margin: 46.1% EPS Growth: 11-12% Free Cash Flow Conversion: 92% Projected Metrics for 2025E: Revenue Growth: 8-9% Operating Margin: 46.6% EPS Growth: 13-14% Free Cash Flow Conversion: 93% STRATEGIC POSITIONING Recent developments reinforce GPN's leadership in: Integrated payments with strong new partner acquisition B2B payments expansion through EVO integration Software-driven solutions with continued innovation International market penetration RECOMMENDATION RATIONALE Our STRONG BUY recommendation at current price of $105.71 is based on: Current valuation represents significant discount to intrinsic value Strong Q3 2024 execution with improving operating leverage Strategic initiatives creating clearer growth path Robust free cash flow generation supporting shareholder returns
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US$142.00
FV
22.8% undervalued
intrinsic discount
13.04%
Revenue growth p.a.
Set as Fair Value
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22 days ago
author updated this narrative
Global Payments
WA
Analyst Price Target
Consensus Narrative from 29 Analysts
Focusing On Core Assets And Global Expansion Will Improve Operational Efficiency
Key Takeaways Strategic focus on core assets and international expansion are expected to drive revenue growth and improve operational efficiency. Divestiture of non-core assets and cloud modernization enhance potential for increased earnings and shareholder returns.
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US$132.32
FV
17.2% undervalued
intrinsic discount
1.78%
Revenue growth p.a.
Set as Fair Value
0
users have liked this narrative
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users have followed this narrative
12 days ago
author updated this narrative
Your Valuation for
GPN
Global Payments
Your Fair Value
US$
Current Price
US$109.62
23.0% overvalued
intrinsic discount
Growth estimate over
Annual revenue growth rate
5 Years
time period
%/yr
Decrease
Increase
Past
Future
0
11b
2015
2018
2021
2024
2025
2027
2030
Revenue US$11.2b
Earnings US$1.5b
Advanced
Set as Fair Value