Global Payments Inc. GPN has been emphasizing on acquisitions to expedite growth. A number of buyouts made in recent years added to the company’s scale and size. One of the most notable among these is the purchase of Heartland Payments Systems (completed in 2016). The merger significantly expanded Global Payments’ small and medium-sized enterprise distribution, merchant base and vertical reach in the United States.
Other acquisitions including the assets of FIS Gaming Business, Pay and Shop Limited, Ezidebit, PayPros, eWay, the communities and sports divisions of ACTIVE Network have added to the company’s overall business.
Recently, the company has announced to acquire AdvancedMD, a leading provider of cloud-based software as a service or SaaS solutions to small-to-medium-sized physician practices in the United States. With this transaction, the company will be able to further expand its technology-enabled software-driven strategy toward a 60% target established at its Investor Day in March.
These consolidations have contributed in part to the company’s top-line growth. Its revenues witnessed a CAGR of 12.8% between 2007 and 2017. The revenue growth trend continued in the first half of 2018 (increase of 21%). There is ever-increasing demand for electronic payment transactions, which provides the company with abundant scope for growth. For 2018, adjusted revenues are estimated between $3.9 billion and $3.975 billion. The bottom line reflects a skyrocketing rise of 1315% over the level in 2017.
In addition to new investments, the company is focused on widening its worldwide omni-channel capabilities and increasing its exposure to faster growth markets. It is witnessing strength in its worldwide e-commerce and omni solutions business and is on track to progress toward achieving the 20% revenue contribution target set for 2020.
Global Payments is also well-positioned in the rapidly growing markets and is accelerating its sales efforts as it expands the distribution channels and leverage its best-in-class technology plus products into new geographies. The company made many tie-ups in this vein. Some of these are partnership with CaixaBank as well as a joint venture with Erste Bank in Central Europe, which bought differentiated solutions including e-commerce to highly attractive, underpenetrated markets.
The company’s investments in growth-oriented projects along with a strong macro economy, which increase payment, hold the company in good stead for growth.
In a year’s time, the stock has rallied 24% matching the industry’s increase.
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Global Payments carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are WEX Inc. WEX, Cardtronics plc CATM and
Total System Services Inc. TSS. While Cardtronics sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
WEX Inc. has seen the Zacks Consensus Estimate for current and next-year earnings being raised 0.6% and 1.6%, respectively, over the past 30 days.
Cardtronics has seen the Zacks Consensus Estimate for 2018 and 2019 earnings being moved 13.3% and 8.2% north, respectively, over the past 60 days.
Total System has seen the Zacks Consensus Estimate for current-year earnings and 2019 bottom line being revised 1.4% and 1.7% upward, respectively, over the past 60 days.
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