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Global Payments Hits 52-Week High on Strong Q1, Recent Deals

Payment technology services provider Global Payments Inc.’s GPN shares touched a 52-week high of $87.27, on May 9. The company’s shares received an uplift from strong first-quarter earnings and raised guidance. A number of recently announced deals might have caused the surge in the stock price.
 
Over the past year, the stock has returned 17.5%, outperforming the 14.7% gain of the Zacks categorized Financial Transaction Services industry and 15% gain of the S&P 500 index. 
 
 
Strong earnings reported by the company last week was well received by investors. It beat its bottom line and top line estimates by 8% and 4.7%, respectively. 
 
Global Payments raised its 2017 guidance, following a strong first quarter, which reflects a strong operating environment. The company now expects adjusted net revenue to range from $3.38 billion to $3.46 billion, or growth of 19% to 22% over 2016. Global Payments anticipates adjusted operating margin to expand by 110 basis points. Adjusted earnings per share are expected to be in a range of $3.78 to $3.95, reflecting growth of 19% to 24% over 2016, which includes the impact of its recent refinancing.
 
Investors view the company’s acquisition of Heartland favorably. The buyout accelerated Global Payments’ growth by broadening its direct distribution channels in the United States and enhancing its exposure in vertical markets.
 
In the previous week, the company announced the offering of services of Apple Pay for merchants in Taiwan. The move is focused on implementing and delivering innovative and safe payment technology solutions and reflects investors’ confidence over the company. Global Payments also offers Apple Pay services in Hong Kong, Singapore and other markets.
 
The company announced the extension of its relationship with Caesars Entertainment Corporation. Global Payments provides software-led payment solutions to Caesars’. The extension speaks of  superior, reliable and secure technological payment services provided by Global Payments. The company has been performing strongly in the gaming business. 
 
Earlier this month, Global Payments entered into debt refinancing agreement, reducing the interest rate spread on all credit facilities by 50 basis points and keeping the  company’s total borrowings, unchanged.
 
Global Payments carries a Zacks Rank #3 (Hold). You can see https://www.zacks.com/registration/premium/login/?continue_t...">the complete list of today’s Zacks #1 Rank stocks here.
 
Other better ranked players in the same segment are Total System Services Inc. TSS, Vantiv, Inc. VNTV, and Visa Inc. V. Each of these stocks carry a Zacks Rank #2 (Buy). The bottom lines of these three players beat their  estimates by 8.22%, 3.28% and 8.9%, respectively.
 

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Visa Inc. (V): Free Stock Analysis Report
 
Total System Services, Inc. (TSS): Free Stock Analysis Report
 
Global Payments Inc. (GPN): Free Stock Analysis Report
 
Vantiv, Inc. (VNTV): Free Stock Analysis Report
 
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