3. Global Payments Inc. (NYSE:GPN)
Average Analyst Price Target Upside: 47.95%
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN) is a leading provider of payment technology and software solutions that facilitate electronic transactions across the Americas, Europe, and the Asia-Pacific. The company offers a comprehensive range of products and services designed to advance the movement of money and manage financial transactions.
The portfolio includes payment processing, merchant services, point-of-sale solutions, and online and mobile payment options. The company caters to a diverse client base, from small businesses to large corporations, financial institutions, and government agencies.
In Q2, 66 hedge funds tracked by Insider Monkey held stakes in Global Payments (NYSE:GPN), with positions worth $3.678 billion. As of the second quarter, Pzena Investment Management is the most significant shareholder in the company. The firm has increased its stake in the company by 195% to 6.4 million shares worth $621.1 million.
At its recent 2024 Investor Conference, the company outlined a renewed focus on operational transformation and long-term value creation. It has identified potential divestitures that could account for approximately $500 million to $600 million in annual revenue.
It indicates a commitment to streamlining operations and enhancing profitability, which will allow Global Payments (NYSE:GPN) to concentrate on its core strengths and drive growth. The company has set ambitious yet achievable targets for 2025, with expectations of mid-single-digit growth in adjusted net revenue, around 10% growth in adjusted EPS, and a 50 basis point expansion in adjusted operating margins.
The outlook for the subsequent years, 2026 and 2027, is equally promising. It expects adjusted net revenue growth in the mid-to-high-single digits, with adjusted EPS growth projected in the low teens.
The company expects its ongoing transformation and streamlining efforts to generate over $500 million in run-rate operating income benefits by mid-2027, with around 30% of these benefits expected to materialize in 2025. The proactive approach to managing operations not only improves profitability but also positions the company favorably for sustainable performance in the competitive payments landscape.
Additionally, Global Payments (NYSE:GPN) has a consensus Buy rating from 37 analysts. As of September 26, the average price target of $144.50 implies an upside of 47.95% from the stock’s price. It is among our best long term tech stocks to invest in now.
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.”
