Global Payments Hits 52-Week High: Is Further Upside Left?
On Nov 14, 2019, shares of Global Payments, Inc. GPN hit a 52- week high of $177.57. The surge in the stock came on the back of its recently-completed acquisition of Total System Services, strong earnings performance, raised outlook, and recently-signed deals and partnerships.
In a year’s time, the stock has gained 62.2%, compared with the industry’s growth of 25.4%.
Global Payments’ combination with Total System significantly accelerates the company’s technology-enabled software-driven mission. The acquisition establishes Global Payments as the leading provider of integrated payment solutions, own software in merchants and omnichannel capabilities in the most attractive markets globally.
Recently, Global Payments also made an agreement with Desjardins, to purchase the Québec-based bank's existing portfolio of approximately 40,000 merchants and have executed an exclusive referral partnership to provide acquiring solutions to its clients for the next decade.
Global Payments has also partnered with Citi to offer payment acceptance services to its multinational banking clients on an omnichannel basis. The company expects to be in market with Citi by year-end 2019.
The company also signed several significant global omnichannel customers including the UK based online luxury retailer, MATCHESFASHION and a rapidly expanding modern high-tech hotel chain, Eurotel.
Global Payments is also expanding its unified commerce platform (UCP). The company is now live in the United States in addition to Canada and Asia Pacific, and is rolling out UCP in the U.K.
In its Consumer Solutions business, the company announced partnership with Samsung to integrate the Netspend digital MasterCard into Samsung’s mobile wallet and provide a variety of payment solutions, including peer to peer.
Global Payments is further strategizing to grow its business. In this vein, the company is making efforts to align its merchant organizations and go-to-market strategy in the United States. It expects to start cross-selling products, including Bio TSYS, Genius and ProPay, as well as the subscription-based engagement and analytics and vertical software solutions in 2020.
The conversion of the Capital One Walmart portfolio in October provides Global Payments an opportunity for growth.
The company is engaged in preliminary discussions with its existing global bank partners on issuer processing opportunities for Total System.
Also, Global Payments’ unit Netspend is actively working on new business to business, business to consumer and peer to peer capabilities and opportunities for its restaurant and gaming customers, as well as in new geographies.
The company raised its 2019 earnings outlook in the range of $6.12-$6.20, indicating growth of 18-20% over 2018 (compared with the earlier guidance of $6.00-$6.15). For 2019, it expects adjusted net revenues plus network fees in the band of $5.6-$5.63 billion, suggesting growth of 41-42%.
We believe that the company’s strong fundamentals will further boost its performance.
Global Payments sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the same space are Mastercard Incorporated MA, Envestnet, Inc. ENV and FleetCor Technologies, Inc. FLT. Each of these stocks carries a Zacks Rank #2 (Buy) and have surpassed estimates in the last reported quarter by 6.97%, 3.45% and 2.07%, respectively.
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