1. Global Payments Inc. (NYSE:GPN)
Market Cap: $25.78 billion
FWD PE Ratio: 8.76
YTD Share Price Decline: 20.5%
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN) is a payment technology company that offers innovative solutions that help businesses operate efficiently across multiple channels. It operates in two primary segments: Merchant Solutions and Issuer Solutions. The company has over 4 million customers across more than 100 countries.
The Merchant Solutions segment provides businesses worldwide with technology for processing card and digital payments, offering additional services like terminal rentals, chargeback resolution, and business analytics.
The Issuer Solutions segment of Global Payments (NYSE:GPN) offers financial institutions and service providers tools to manage card portfolios, reduce complexity, and provide seamless cardholder experiences. It supports B2B payments, commercial accounts, and electronic alternatives, with services like fraud detection, risk management, customer service, and business intelligence.
At its 2024 Investor Conference, the company focused on operational transformation and long-term value creation. The company plans potential divestitures amounting to $500 million to $600 million in annual revenue and plans to streamline operations and improve profitability.
For 2025, Global Payments (NYSE:GPN) targets mid-single-digit growth in adjusted net revenue, about 10% growth in adjusted EPS, and a 50 basis point increase in operating margins. The outlook for 2026 and 2027 is strong, with expected mid-to-high-single-digit revenue growth and EPS growth in the low teens. The company’s transformation efforts are expected to yield over $500 million in operating income benefits by mid-2027, with 30% realized in 2025, which positions it well for sustained success.
Parnassus Investments stated the following regarding Global Payments Inc. (NYSE:GPN) in its Q2 2024 investor letter:
“Global Payments Inc. (NYSE:GPN) stock fell on investor fears that a slowing economy could weigh on payment processing companies. The company will host an investor day focused on improving efficiencies and strategic redeployment of assets in the fall, which we believe will unlock hidden value in the undervalued shares.”
While we acknowledge the potential of Global Payments Inc. (NYSE:GPN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GPN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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