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Global Payments Rides on Buyouts & Investments in Technology

Zacks Equity Research

Global Payments Inc. GPN has been emphasizing acquisitions for expedited growth. A number of buyouts made in recent years have added to its scale and size.  One of the most notable among these is the purchase of Heartland Payments Systems (completed in 2016). The merger significantly expanded Global Payments’ small and medium-sized enterprise distribution, merchant base and vertical reach in the United States.

Other acquisitions, which includes — assets of FIS Gaming Business, Pay and Shop Limited, Ezidebit, PayPros, eWay, the communities and sports divisions of ACTIVE Network, Sentral Education in Australia—have added to the company’s overall business. Recently, it acquired AdvancedMD, a leading provider of cloud-based software as a service, or SaaS solutions to small to medium-sized physician practices in the United States. With this transaction, the company will be able to further expand its technology-enabled software-driven strategy toward a 60% target.

These acquisitions have contributed to the company’s top-line growth. There is ever-increasing demand for electronic payment transactions, which provide it with abundant scope for growth.

The company is also focused on expanding its worldwide omni-channel capabilities and increasing its exposure to faster growth markets.
Global Payments is also well positioned in faster-growing markets and is accelerating sales efforts, as it expands its distribution and leverage its best-in-class technology and products into new geographies.

The company has made many tie ups in this vein. Some of these include partnership with CaixaBank, joint venture with Erste Bank in Central Europe which has brought differentiated solutions, including e-commerce to highly attractive, underpenetrated markets.

The company’s investment in growth strategies along with a strong macro economy, which increases payment, holds it in good stead.

In a year’s time the stock has gained 27%, compared with the industry’s gain of 15%.

Global Payments carries a Zacks Rank #2 (Buy).

Other stocks worth considering are WEX Inc. WEX, Cardtronics plc CATM and FleetCor Technologies, Inc. FLT  While Cardtronics and WEX carry a Zacks Rank #1 (Strong Buy), the other one sport the same Zacks Rank as Global Payments.   You can see the complete list of today’s Zacks #1 Rank stocks here.

WEX, Cardtronics and FleetCor have surpassed estimates in each of the four quarters with an average positive surprise of 2.12%, 43.8% and 1.71%, respectively.

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