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Based in Atlanta, Georgia, Global Payments Inc. (GPN) provides payment technology and software solutions for card, check, and digital-based payments. Valued at a market cap of $23.9 billion, the company also offers value-added services such as data analytics, fraud prevention, and integrated software solutions to enhance business operations.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and GPN fits the label perfectly, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the software - infrastructure industry. Its key strengths lie in its advanced digital payment infrastructure, which supports various payment methods, including credit and debit cards, mobile wallets, and contactless transactions. The company’s global reach, serving merchants across multiple industries such as retail, hospitality, and healthcare, gives it a competitive edge.
Despite its notable strength, this financial services company has slipped 40% from its 52-week high of $136.36, reached on Mar. 26, 2024. Moreover, it has declined 13.1% over the past three months, lagging behind the broader Technology Select Sector SPDR Fund’s (XLK) 9.6% loss over the same time frame.
In the longer term, GPN has fallen 26.8% over the past 52 weeks, considerably underperforming XLK’s 1.8% uptick. Moreover, on a YTD basis, shares of GPN are down 13.1%, compared to XLK’s 8.2% loss.
To confirm its bearish trend, GPN has been trading below its 200-day moving average since mid-February, and has remained below its 50-day moving average since early January.
On Feb. 13, shares of GPN plunged 4.3% as the company delivered weaker-than-expected Q4 adjusted EPS of $2.95 and adjusted revenue of $2.3 billion. However, the top line improved 4.7% year-over-year, while the bottom line grew 11.3% from the year-ago quarter, but due to the rising cost of service, it missed the estimates. Adding to the positives, operating expenses declined 13.1% annually and led to a notable 67.1% increase in operating income.
Looking ahead, for fiscal 2025, the company expects adjusted net revenue growth between 5% and 6%, and anticipates adjusted EPS growth in the range of 10% to 11%.
GPN’s underperformance becomes more evident when compared to its rival, Corpay, Inc. (CPAY), which gained 15.2% over the past 52 weeks and 4.3% on a YTD basis.
Despite GPN’s recent underperformance relative to its broader sector, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 33 analysts covering it, and the mean price target of $130.48 suggests a 34% premium to its current levels.
