Global Community

Catalysts Most Immediate Catalysts (1–2 Years) Increased Adoption of Robotic Surgery: Hospitals and surgical centers continue to adopt Intuitive Surgical’s da Vinci systems as clinical evidence shows improved outcomes and reduced recovery times. Expansion into more surgical specialties (e.g., gynecology, urology, general surgery) drives near-term revenue growth.

HF Sinclair Corporation represents an intricate investment proposition in the ever-shifting dynamics of the energy sector. Against the background of recent underperformance, a combination of factors suggests probable undervaluation, for which a closer look might be warranted.

Smith Micro Software, Inc. (SMSI) specializes in developing software solutions for wireless service providers, focusing on digital lifestyle and security technologies.

Catalysts Products or Services Impacting Sales or Earnings T-Mobile (TMUS) has several key products and services that could significantly impact its sales and earnings: 5G Network Expansion : T-Mobile’s aggressive rollout of its 5G network is a major growth driver. The company has been leading in 5G coverage and performance, which attracts more customers and increases service revenues.

Catalysts Fueling Tencent's Future: Expansion of Cloud Services : Tencent Cloud is rapidly growing, capitalizing on the global surge in digital transformation. As businesses increasingly migrate to the cloud for scalability and efficiency, Tencent's robust infrastructure and advanced AI capabilities position it as a formidable contender in cloud computing, both within China and internationally.

Key Takeaways Disney will transform to a tourism-centered company focusing on parks and resorts, a space lacking any serious competition. I expect sales to grow 4.3% over the next 5 years, primarily driven by Parks.

LYC Healthcare: Progress Amid Challenges LYC Healthcare’s latest Q2 FY2025 results reflect steady progress, with revenue rising 29% year-on-year to RM41.74 million from RM32.01 million. This growth was driven by strong performance in its nutraceutical, clinical, and confinement businesses, alongside contributions from new subsidiaries.

Why Amazon? Amazon revolutionized the way consumers shop.

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