Global Payments Inc. Faces Challenges but Holds Promise for Investors
With a market cap of $29 billion, Global Payments Inc. (GPN) stands out as a prominent provider in the payment technology and software sector. The company serves clients throughout the Americas, Europe, and the Asia-Pacific region. It operates via two main segments: Merchant Solutions, which provides a full range of payment processing and enterprise software services, and Issuer Solutions, which assists financial institutions in managing card portfolios and commercial payment systems.
Large-cap stocks, which are companies valued at $10 billion or more, include Global Payments. Its strategic emphasis on innovation ensures secure and smooth payment experiences across card, digital, and check-based platforms. Headquartered in Atlanta, Georgia, the company has progressed in international markets through targeted acquisitions and partnerships.
Despite its strengths, Global Payments has seen a decline, with shares falling 19.2% from a 52-week high of $141.77 set in February. Over the last three months, GPN shares rose only 2.3%, underperforming the Dow Jones Industrials Average’s ($DOWI) 4.5% increase during the same period.
Looking at the year-to-date performance, GPN is down 9.7%, lagging behind the DOWI’s 15.4% gain. Over the past year, shares of Global Payments have dropped 10.6%, while the Dow Jones has returned 16.6% in the same timeframe.
Interestingly, GPN stock has remained above its 50-day and 200-day moving averages since November, indicating some resilience.
Despite reporting a weaker-than-expected Q3 adjusted EPS of $3.08 and adjusted revenue of $2.4 billion, shares of Global Payments rose 4.3% on October 30. This uptick followed the company’s reaffirmation of its 2024 guidance, projecting adjusted net revenue of $9.2 billion – $9.3 billion and adjusted EPS of $11.54 – $11.70. These figures helped reassure investors about the company’s long-term outlook. Additionally, the announcement of a $600 million accelerated share repurchase program and a $1.1 billion agreement to sell AdvancedMD highlighted effective capital management and focus on core business operations. Notably, the Merchant Solutions segment reported a 6.7% growth in revenue and an 8.7% rise in adjusted operating income, reflecting its resistance to market pressures.
In contrast to Global Payments, Corpay, Inc. (CPAY) has shown superior performance, with shares increasing by 28.9% over the last 52 weeks and 26.6% year-to-date.
Despite the setbacks faced by GPN, analysts express moderate optimism regarding its future. The stock holds a consensus rating of “Moderate Buy” from the 34 analysts covering it, with a mean price target of $132.69, suggesting a potential upside of 15.8% from current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
