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GPN

Global Payments NYSE:GPN Stock Report

Last Price

US$135.44

Market Cap

US$37.5b

7D

5.8%

1Y

-21.0%

Updated

14 Aug, 2022

Data

Company Financials +
GPN fundamental analysis
Snowflake Score
Valuation5/6
Future Growth3/6
Past Performance1/6
Financial Health3/6
Dividends0/6

GPN Stock Overview

Global Payments Inc. provides payment technology and software solutions for card, electronic, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific.

Global Payments Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Global Payments
Historical stock prices
Current Share PriceUS$135.44
52 Week HighUS$175.73
52 Week LowUS$105.52
Beta1.05
1 Month Change17.98%
3 Month Change12.94%
1 Year Change-20.99%
3 Year Change-14.14%
5 Year Change44.45%
Change since IPO3,526.85%

Recent News & Updates

Aug 04

Global Payments: Time To Pay Up

Global Payments is a long-term secular and acquisitive growth play in the payment space. The company has a sound long-term track record. Valuations have been reset over the past year, as a fair earnings multiple looks compelling given the company's long-term growth prospects and track record. About eight years ago, I called Global Payments Inc. (GPN) a great business and long-term investment, although I was mindful of the timing after shares had enjoyed some momentum at the time. The payment company had seen solid growth at the time, and while the past performance was strong, and the future outlook was solid, the valuation more than reflected this already. A Quick Look Back Late in 2014, Global Payments has seen solid operating momentum, reporting double-digit sales growth with revenues approaching the $3 billion mark, while posting earnings around $4 per share at the time on the back of operating margins in the high-teens (GAAP margins those are). A net debt load of $1.5 billion translated into a leverage ratio between 2.5 and 3 times on the back of $560 million in EBITDA. The company had 69 million shares trading at $76 at the time, although this valuation really coincided with a $38 per-share price following a two-for-one stock split in 2015. The valuation at 20 times earnings looked more than fair to me, given the overall valuations at the time, including the leverage position. However, the growth performance and prospects were sufficient to create long-term appeal, albeit that the valuation looked full at the time. On Fire The long-term outlook for Global Payments has certainly come to fruition, as shares rose to a high of $200, which means that shares have essentially quadrupled from the $38 split-adjusted price late in 2014. Shares traded in the low $200s in 2021, only to witness a meaningful pullback alongside the shares of other technology and payment companies. Shares now trade hands at $130, and that is actually up from levels in the low $100s earlier in June. The company continued to grow amidst secular growth and deal-making, which includes a 2021 deal for Zego, in an all-cash transaction valued at $925 million. By February 2022, Global Payments posted its 2021 results, with revenues up 15% to $8.5 billion. The business has essentially tripled its sales since 2014. The company continues to be very profitable, as adjusted operating margins came in at 42%. This is not a fair comparison to the high-teen margins in 2014, as those were GAAP margins. This comes as the nature of the business model and deal-making efforts results in structural and substantial amortization charges. The company now has 293 million shares outstanding, which, adjusted for the two-for-one stock split, implies that the share count has doubled, adjusted for the split. The growth and dilution have been the result of the mega-deal with TSYS, which closed in 2019. The company posted earnings of $8.16 per share in 2021, as the majority of these earnings are the result of adjustments from the GAAP earnings starting point. If we back out $0.47 per share in stock-based compensation expenses, a $7.70 earnings per share number translates into a reasonable 17 times earnings multiple. Net debt has risen to $10 billion (by year-end 2021) following the deal-making efforts, as adjusted operating earnings were posted at $3.2 billion in 2021, translating to high, but still very manageable, leverage ratios. With a current enterprise valuation of $47 billion, this implies a valuation around 5 times sales here. The company posted solid growth in the first quarter, guiding for adjusted earnings at a midpoint of $9.56 per share for this year. While second quarter sales growth slowed down to 6%, the company actually upped the midpoint of the adjusted earnings guidance to $9.64 per share. Net debt has inched up to $10.7 billion by now, mostly the result of buybacks which reduced the share tally to 278 million shares outstanding. In the meantime, the company has reached a deal to divest Netspend consumer assets in a $1 billion deal, only to reinvest the money into EVO Payments (EVOP). A Big Deal Alongside the second quarter earnings report, Global Payments has reached a deal to acquire EVO Payments in a $4.0 billion deal, after paying a 24% premium for the shares.

Shareholder Returns

GPNUS ITUS Market
7D5.8%1.2%3.2%
1Y-21.0%-26.5%-10.2%

Return vs Industry: GPN exceeded the US IT industry which returned -26.5% over the past year.

Return vs Market: GPN underperformed the US Market which returned -10.2% over the past year.

Price Volatility

Is GPN's price volatile compared to industry and market?
GPN volatility
GPN Average Weekly Movement5.2%
IT Industry Average Movement9.3%
Market Average Movement7.7%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: GPN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: GPN's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
196725,000Jeff Sloanhttps://www.globalpaymentsinc.com

Global Payments Inc. provides payment technology and software solutions for card, electronic, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific. It operates through three segments: Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions. The Merchant Solutions segment offers authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements, and on-line reporting services.

Global Payments Fundamentals Summary

How do Global Payments's earnings and revenue compare to its market cap?
GPN fundamental statistics
Market CapUS$37.54b
Earnings (TTM)US$76.92m
Revenue (TTM)US$8.83b

488.0x

P/E Ratio

4.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
GPN income statement (TTM)
RevenueUS$8.83b
Cost of RevenueUS$3.79b
Gross ProfitUS$5.04b
Other ExpensesUS$4.96b
EarningsUS$76.92m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.28
Gross Margin57.06%
Net Profit Margin0.87%
Debt/Equity Ratio52.5%

How did GPN perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

370%

Payout Ratio

Does GPN pay a reliable dividends?

See GPN dividend history and benchmarks
When do you need to buy GPN by to receive an upcoming dividend?
Global Payments dividend dates
Ex Dividend DateSep 15 2022
Dividend Pay DateSep 30 2022
Days until Ex dividend31 days
Days until Dividend pay date46 days

Does GPN pay a reliable dividends?

See GPN dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is GPN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GPN?

Other financial metrics that can be useful for relative valuation.

GPN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5.5x
Enterprise Value/EBITDA13.5x
PEG Ratio5.4x

Price to Sales Ratio vs Peers

How does GPN's PS Ratio compare to its peers?

GPN PS Ratio vs Peers
The above table shows the PS ratio for GPN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average5.7x
FISV Fiserv
4.1x6.1%US$70.0b
PAYX Paychex
10.6x6.3%US$48.8b
FIS Fidelity National Information Services
4.3x6.7%US$62.1b
BR Broadridge Financial Solutions
3.8x4.9%US$21.5b
GPN Global Payments
4.2x6.9%US$37.5b

Price-To-Sales vs Peers: GPN is good value based on its Price-To-Sales Ratio (4.2x) compared to the peer average (5.7x).


Price to Earnings Ratio vs Industry

How does GPN's PE Ratio compare vs other companies in the US IT Industry?

Price-To-Sales vs Industry: GPN is expensive based on its Price-To-Sales Ratio (4.2x) compared to the US IT industry average (3x)


Price to Sales Ratio vs Fair Ratio

What is GPN's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GPN PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio4.2x
Fair PS Ratio6.9x

Price-To-Sales vs Fair Ratio: GPN is good value based on its Price-To-Sales Ratio (4.2x) compared to the estimated Fair Price-To-Sales Ratio (6.9x).


Share Price vs Fair Value

What is the Fair Price of GPN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GPN ($135.44) is trading below our estimate of fair value ($281.14)

Significantly Below Fair Value: GPN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Global Payments forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


89.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GPN's forecast earnings growth (89.7% per year) is above the savings rate (1.9%).

Earnings vs Market: GPN's earnings (89.7% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: GPN's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GPN's revenue (6.9% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: GPN's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GPN's Return on Equity is forecast to be low in 3 years time (12.5%).


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Past Performance

How has Global Payments performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


14.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GPN has a large one-off loss of $1.3B impacting its June 30 2022 financial results.

Growing Profit Margin: GPN's current net profit margins (0.9%) are lower than last year (10.8%).


Past Earnings Growth Analysis

Earnings Trend: GPN's earnings have grown by 14.4% per year over the past 5 years.

Accelerating Growth: GPN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GPN had negative earnings growth (-91.1%) over the past year, making it difficult to compare to the IT industry average (20.5%).


Return on Equity

High ROE: GPN's Return on Equity (0.4%) is considered low.


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Financial Health

How is Global Payments's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: GPN's short term assets ($5.2B) do not cover its short term liabilities ($6.0B).

Long Term Liabilities: GPN's short term assets ($5.2B) do not cover its long term liabilities ($14.2B).


Debt to Equity History and Analysis

Debt Level: GPN's net debt to equity ratio (44.4%) is considered high.

Reducing Debt: GPN's debt to equity ratio has reduced from 150.5% to 52.5% over the past 5 years.

Debt Coverage: GPN's debt is well covered by operating cash flow (22.8%).

Interest Coverage: GPN's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet


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Dividend

What is Global Payments's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.74%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 15 2022Ex Dividend DateSep 15 2022Dividend Pay DateSep 30 202215 days from Ex DividendBuy in the next 31 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: GPN's dividend (0.74%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: GPN's dividend (0.74%) is low compared to the top 25% of dividend payers in the US market (3.95%).


Stability and Growth of Payments

Stable Dividend: GPN is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: GPN is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Earnings Payout to Shareholders

Earnings Coverage: GPN is not paying a notable dividend for the US market.


Cash Payout to Shareholders

Cash Flow Coverage: GPN is not paying a notable dividend for the US market.


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Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure


CEO

Jeff Sloan (55 yo)

8.83yrs

Tenure

US$23,318,393

Compensation

Mr. Jeffrey S. Sloan, also known as Jeff, has been the Chief Executive Officer at Global Payments Inc. since October 1, 2013. Mr. Sloan served as the President at Global Payments from June 1, 2010 to June...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD23.32M) is above average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Jeff's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: GPN's management team is seasoned and experienced (5.8 years average tenure).


Board Members

Experienced Board: GPN's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GPN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Global Payments Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Global Payments Inc.
  • Ticker: GPN
  • Exchange: NYSE
  • Founded: 1967
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Implied Market Cap: US$37.539b
  • Shares outstanding: 277.16m
  • Website: https://www.globalpaymentsinc.com

Number of Employees


Location

  • Global Payments Inc.
  • 3550 Lenox Road
  • Atlanta
  • Georgia
  • 30326
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/14 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.