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Global Payments (GPN) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Global Payments (GPN) closed at $195.49 in the latest trading session, marking a -1.65% move from the prior day. This move lagged the S&P 500's daily loss of 1.57%. Meanwhile, the Dow lost 1.57%, and the Nasdaq, a tech-heavy index, lost 1.89%.

Coming into today, shares of the electronics payment processing company had gained 8.33% in the past month. In that same time, the Business Services sector gained 3.5%, while the S&P 500 gained 2.35%.

Investors will be hoping for strength from GPN as it approaches its next earnings release, which is expected to be February 12, 2020. In that report, analysts expect GPN to post earnings of $1.59 per share. This would mark year-over-year growth of 19.55%. Our most recent consensus estimate is calling for quarterly revenue of $2.16 billion, up 163.58% from the year-ago period.

Investors might also notice recent changes to analyst estimates for GPN. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% higher. GPN is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that GPN has a Forward P/E ratio of 26.28 right now. This valuation marks a premium compared to its industry's average Forward P/E of 23.43.

Also, we should mention that GPN has a PEG ratio of 1.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial Transaction Services was holding an average PEG ratio of 1.76 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 55, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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