4. Global Payments Inc. (NYSE:GPN)
Forward P/E Ratio: 10.14
Earnings Growth This Year: 11.14%
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN) is a payments technology company that specializes in providing software and services for processing payments. It operates mainly through two segments: Merchant Solutions and Issuer Solutions.
Management has a clear focus on strengthening its market share in the small and medium-sized businesses sector. This strategy has proved to work well for the company as it has maintained high customer retention rates for its Merchant Solutions segment, particularly in North America, where customers have been using its services for over 6 years.
During the third quarter of fiscal 2024, Global Payments Inc. (NYSE:GPN) grew its adjusted revenue by 6% year-over-year to reach $2.4 billion. Its revenue growth was driven by consistent growth in both its segments. While the Issuer Segment revenue grew 2%, the Merchant segment took the lead by improving more than 7% during the same time.
Looking ahead management expects revenue growth between 6% to 7% for the fiscal year 2024, with 100% free cash flow conversion. It is one of the best affordable tech stocks to invest in now.
Weitz Large Cap Equity Fund stated the following regarding Global Payments Inc. (NYSE:GPN) in its Q3 2024 investor letter:
“We continued to increase the Fund’s positions in Global Payments Inc. (NYSE:GPN) and Idex Corp. during the quarter. Both stocks trade at significant discounts to our business value estimates. The companies have fundamental catalysts that could drive the stocks, but the timetable may have slipped a bit. The challenge is that investors want results now, especially in a bull market. We have specific milestones to track, and we think their achievement can be measured in quarters rather than years. In our view, the potential payoffs are well worth the wait.”
