Estimates for Global Payments Inc. GPN have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock. The stock witnessed the Zacks Consensus Estimate for earnings in 2018 and 2019 being revised 0.8% and 1.7% upward over the last 30 days.
Shares of this Zacks Rank #3 (Hold) company have rallied nearly 10.4% in the past year, underperforming the growth of 14.1%.
Now, let’s focus on some important factors that make Global Payments stock investors’ favorite.
Increasing Top Line: Global Payments has been witnessing strong revenue growth, which is evident from its 10-year CAGR (2007-2017) of 12.8%. The upbeat continued in the first nine months of 2018, with the metric up by 16%. Given the company’s constant effort in enhancing its capabilities via buyouts and alliances, the company’s revenues are likely to grow going forward. For 2018, adjusted revenues are estimated between $3.96 billion and $3.98 billion.
Positive Earnings Surprise History: The company’s earnings surprise history shows that it beat estimates in three of the trailing four quarters, the average positive surprise being 3.54%.
Increased 2018 Guidance: Following solid third-quarter results, Global Payments lifted its 2018 outlook. The company now expects adjusted earnings of 5.12-$5.22, up from the earlier guidance of $5.05-$5.20 per share. The bottom line translates into 28-30% growth over the level in 2017. Adjusted net revenues are estimated between $3.96 billion and $3.98 billion, up from the previous prediction of $3.9-$3.975 billion. The bottom line reflects 15% rise over the level in 2017.
Initiatives: Global Payments has been pursuing acquisitions, collaborations and making joint ventures over the past many years, resulting in top-line growth and expansion. A number of acquisitions made in the recent years added to its scale and size. Some of the mention-worthy buyouts include that of Heartland Payments Systems, Pay and Shop Limited, Ezidebit, PayPros, eWay, the communities and sports divisions of ACTIVE Network, and the most recent ones of AdvanceMD and SICOM.
Moreover, the company constantly invested in technology, resulting to the shift of its business mix toward technology enablement. The increasing demand for online transactions provides abundant growth opportunity for industry players, including Global Payments. The company’s active buyout strategy is expected to help it achieve long-term growth.
Growth Projections: The Zacks Consensus Estimate for current-year earnings per share is pegged at $5.18, representing a year-over-year increase of 29.2% on 13.7% higher revenues of $3.97 billion.
For 2019, the consensus estimate for earnings per share stands at $6.07 on revenues of $4.39 billion, translating into a respective year-over-year rise of 17.12% and 10.71%.
Long-term earnings growth is pegged at 17.4%, higher than the industry’s average of 13.3%, which remains a positive for the company.
Stocks to Consider
Some better-ranked stocks from the same industry are Cardtronics PLC CATM, Evertec, Inc. EVTC and Total System Services, Inc. TSS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardtronics plc provides automated consumer financial services via its network of automated teller machines (ATMs) and multi-function financial services kiosks. The company witnessed average four-quarter beat of 50.24%.
EVERTEC engages in transaction processing business, serving financial institutions, merchants, corporations, and government agencies in Latin America and the Caribbean. It pulled off average earnings surprise of 16.99% over the last four quarters.
Total System deals with payment processing, merchant, and related payment services to financial and non-financial institutions worldwide. It witnessed average four-quarter beat of 7.12%.
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