Amid the rising adoption of technology in the payments space, let us assess the true potential of Atlanta-based Global Payments Inc. (NYSE:GPN), a part of the S&P 500 Index (SPX). Wall Street analysts are upbeat about the stock’s prospects and expect it to deliver solid returns.
Global Payments aces on each of TipRanks proprietary tools, boasting a Perfect 10! Smart Score, a Strong Buy consensus rating, over 20% upside potential, and a dividend. Furthermore, the fintech platform has a Very Positive Hedge Fund Confidence Signal, a Bullish Blogger Sentiment, and a Very Positive Investor Sentiment.
Here’s More About Global Payments: The Business
As the name suggests, Global Payments offers payment technology and software solutions to merchants, issuers, and consumers. Its services span card, electronic, check, and digital-based payments across North America, Europe, the Asia-Pacific, and Latin America. In the past year, GPN stock has gained 31.5%.
Global Payments is a large-cap company and a part of the Fortune 500 list. The company boasts over 4 million payment customers in over 100 countries. Remarkably, GPN processes over 66 billion transactions each year through its fully integrated Unified Commerce Platform.
Moreover, Global Payments leverages its “highly provisioned, low-latency global network” to enable increased authorization rates, and efficient uptime while also reducing fraud, increasing conversion, and keeping customer data safe.
GPN’s Financials Show Positive Momentum
In its most recent earnings report for Q4 FY23, GPN posted better-than-expected adjusted earnings per share (EPS) of $2.65, up 10% year-over-year. Also, adjusted operating margins improved by 30 basis points to 44.8%, with adjusted revenues growing 8% compared to Q4 FY22.
Based on the continued demand momentum witnessed in 2023, GPN expects adjusted net revenue in the range of $9.17 to $9.30 billion in FY24, growing 6% to 7% from the previous year. Also, adjusted EPS is projected to be between $11.54 and $11.70.
Not just that, GPN’s board approved a quarterly dividend of $0.25 per share, payable on March 29. Plus, the board authorized an increase in the stock buyback limit to $2 billion.
The company is even streamlining its operations into a simple payments business by divesting non-core areas. GPN is also enhancing its business through strategic partnerships and acquisitions.
Analyst Opinion
On March 13, Robert W. Baird analyst David Koning reiterated a Buy rating on GPN stock with a price target of $172 (31% upside). The analyst is encouraged by GPN’s leading position (within the top five players) in nearly all regions and industry verticals it operates, especially in the small and medium business (SMB) market.
Koning sees card growth in the mid/high single digits in the U.S. and UK, with certain regions poised to grow faster, including Spain and areas of Asia-Pacific. Meanwhile, Canada is likely to grow in the low-single digits.
Overall, Koning is bullish about the trends for payment processors. Plus, GPN is actively reducing its leverage while earnings are improving.
Is Global Payments a Good Stock to Buy?
With 20 Buys and four Hold recommendations received in the past three months, GPN stock has a Strong Buy consensus rating on TipRanks. The average Global Payments price target of $161.67 implies 23.1% upside potential from current levels.
Ending Thoughts
Global Payments operates in the highly dynamic and competitive space of payment processing. GPN has won analysts’ favor and could offer a decent upside potential in the next twelve months. Investors seeking exposure to the payments market can consider Global Payments stock to boost their overall portfolio.
