GLOBAL PAYMENTS INC (GPN) Stock Fundamental Analysis
NYSE:GPN - New York Stock Exchange, Inc. - US37940X1028 - Common Stock - Currency: USD
Taking everything into account, GPN scores 5 out of 10 in our fundamental rating. GPN was compared to 101 industry peers in the Financial Services industry. While GPN has a great profitability rating, there are quite some concerns on its financial health. GPN may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
In the past year GPN was profitable.
In the past year GPN had a positive cash flow from operations.
In the past 5 years GPN has always been profitable.
Each year in the past 5 years GPN had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 3.35%, GPN is doing good in the industry, outperforming 68.32% of the companies in the same industry.
Looking at the Return On Equity, with a value of 7.05%, GPN is in line with its industry, outperforming 42.57% of the companies in the same industry.
GPN has a Return On Invested Capital of 4.78%. This is in the better half of the industry: GPN outperforms 70.30% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GPN is below the industry average of 7.75%.
The last Return On Invested Capital (4.78%) for GPN is above the 3 year average (4.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.35% | ||
| ROE | 7.05% | ||
| ROIC | 4.78% |
ROA(3y)1.85%
ROA(5y)1.8%
ROE(3y)3.95%
ROE(5y)3.55%
ROIC(3y)4.36%
ROIC(5y)3.81%
1.3 Margins
GPN has a better Profit Margin (15.54%) than 64.36% of its industry peers.
GPN's Profit Margin has improved in the last couple of years.
GPN has a better Operating Margin (23.40%) than 68.32% of its industry peers.
In the last couple of years the Operating Margin of GPN has grown nicely.
Looking at the Gross Margin, with a value of 62.79%, GPN is in the better half of the industry, outperforming 75.25% of the companies in the same industry.
In the last couple of years the Gross Margin of GPN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.4% | ||
| PM (TTM) | 15.54% | ||
| GM | 62.79% |
OM growth 3Y5.13%
OM growth 5Y1.68%
PM growth 3Y11.11%
PM growth 5Y12.13%
GM growth 3Y3.83%
GM growth 5Y1.31%
2. Health
2.1 Basic Checks
GPN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GPN has less shares outstanding than it did 1 year ago.
GPN has less shares outstanding than it did 5 years ago.
GPN has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.17, we must say that GPN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.17, GPN is in the better half of the industry, outperforming 61.39% of the companies in the same industry.
GPN has a debt to FCF ratio of 5.86. This is a neutral value as GPN would need 5.86 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.86, GPN is in the better half of the industry, outperforming 60.40% of the companies in the same industry.
A Debt/Equity ratio of 0.70 indicates that GPN is somewhat dependend on debt financing.
GPN's Debt to Equity ratio of 0.70 is in line compared to the rest of the industry. GPN outperforms 48.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 5.86 | ||
| Altman-Z | 1.17 |
ROIC/WACC0.44
WACC10.96%
2.3 Liquidity
A Current Ratio of 0.97 indicates that GPN may have some problems paying its short term obligations.
With a Current ratio value of 0.97, GPN perfoms like the industry average, outperforming 45.54% of the companies in the same industry.
GPN has a Quick Ratio of 0.97. This is a bad value and indicates that GPN is not financially healthy enough and could expect problems in meeting its short term obligations.
GPN's Quick ratio of 0.97 is in line compared to the rest of the industry. GPN outperforms 48.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
GPN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.84%, which is quite good.
GPN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.36% yearly.
GPN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.68%.
GPN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.52% yearly.
EPS 1Y (TTM)10.84%
EPS 3Y12.23%
EPS 5Y13.36%
EPS Q2Q%11.32%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%4.7%
3.2 Future
GPN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.56% yearly.
GPN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.21% yearly.
EPS Next Y8.25%
EPS Next 2Y10.72%
EPS Next 3Y11.66%
EPS Next 5Y12.56%
Revenue Next Year1.35%
Revenue Next 2Y3.64%
Revenue Next 3Y4.56%
Revenue Next 5Y6.21%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 8.93 indicates a reasonable valuation of GPN.
74.26% of the companies in the same industry are more expensive than GPN, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 29.63. GPN is valued rather cheaply when compared to this.
GPN is valuated reasonably with a Price/Forward Earnings ratio of 8.25.
71.29% of the companies in the same industry are more expensive than GPN, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of GPN to the average of the S&P500 Index (22.68), we can say GPN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.93 | ||
| Fwd PE | 8.25 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GPN indicates a somewhat cheap valuation: GPN is cheaper than 78.22% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GPN indicates a rather cheap valuation: GPN is cheaper than 80.20% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.19 | ||
| EV/EBITDA | 9.6 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GPN may justify a higher PE ratio.
PEG (NY)1.08
PEG (5Y)0.67
EPS Next 2Y10.72%
EPS Next 3Y11.66%
5. Dividend
5.1 Amount
With a yearly dividend of 0.95%, GPN is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.84, GPN pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.95, GPN pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
5.2 History
On average, the dividend of GPN grows each year by 21.27%, which is quite nice.
GPN has been paying a dividend for at least 10 years, so it has a reliable track record.
As GPN did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)21.27%
Div Incr Years0
Div Non Decr Years6
5.3 Sustainability
GPN pays out 16.10% of its income as dividend. This is a sustainable payout ratio.
GPN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP16.1%
EPS Next 2Y10.72%
EPS Next 3Y11.66%
103.18
-2.4 (-2.27%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners92.93%
Inst Owner Change-5.53%
Ins Owners0.83%
Ins Owner Change-1%
Market Cap26.26B
Analysts75
Price Target133.92 (29.79%)
Short Float %2.42%
Short Ratio3.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.95% |
Yearly Dividend0.99
Dividend Growth(5Y)21.27%
DP16.1%
Div Incr Years0
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.74%
Min EPS beat(2)-2.29%
Max EPS beat(2)-1.2%
EPS beat(4)1
Avg EPS beat(4)-0.96%
Min EPS beat(4)-2.29%
Max EPS beat(4)0.03%
EPS beat(8)4
Avg EPS beat(8)-0.06%
EPS beat(12)5
Avg EPS beat(12)-0.18%
EPS beat(16)8
Avg EPS beat(16)0.34%
Revenue beat(2)0
Avg Revenue beat(2)-1.82%
Min Revenue beat(2)-1.96%
Max Revenue beat(2)-1.67%
Revenue beat(4)0
Avg Revenue beat(4)-1.24%
Min Revenue beat(4)-1.96%
Max Revenue beat(4)-0.64%
Revenue beat(8)1
Avg Revenue beat(8)-0.72%
Revenue beat(12)5
Avg Revenue beat(12)2.88%
Revenue beat(16)9
Avg Revenue beat(16)4.87%
PT rev (1m)-1.64%
PT rev (3m)-0.57%
EPS NQ rev (1m)-0.69%
EPS NQ rev (3m)-0.67%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)-0.19%
Revenue NQ rev (1m)-1.44%
Revenue NQ rev (3m)-0.94%
Revenue NY rev (1m)-0.43%
Revenue NY rev (3m)-0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.93 | ||
| Fwd PE | 8.25 | ||
| P/S | 2.6 | ||
| P/FCF | 9.19 | ||
| P/OCF | 7.43 | ||
| P/B | 1.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.6 |
EPS(TTM)11.55
EY11.19%
EPS(NY)12.5
Fwd EY12.12%
FCF(TTM)11.23
FCFY10.88%
OCF(TTM)13.88
OCFY13.45%
SpS39.71
BVpS87.55
TBVpS-50.84
PEG (NY)1.08
PEG (5Y)0.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.35% | ||
| ROE | 7.05% | ||
| ROCE | 5.82% | ||
| ROIC | 4.78% | ||
| ROICexc | 5.1% | ||
| ROICexgc | 58.12% | ||
| OM | 23.4% | ||
| PM (TTM) | 15.54% | ||
| GM | 62.79% | ||
| FCFM | 28.28% |
ROA(3y)1.85%
ROA(5y)1.8%
ROE(3y)3.95%
ROE(5y)3.55%
ROIC(3y)4.36%
ROIC(5y)3.81%
ROICexc(3y)4.61%
ROICexc(5y)4.02%
ROICexgc(3y)47.47%
ROICexgc(5y)47.57%
ROCE(3y)5.34%
ROCE(5y)4.65%
ROICexcg growth 3Y5.38%
ROICexcg growth 5Y12.85%
ROICexc growth 3Y11.96%
ROICexc growth 5Y18.11%
OM growth 3Y5.13%
OM growth 5Y1.68%
PM growth 3Y11.11%
PM growth 5Y12.13%
GM growth 3Y3.83%
GM growth 5Y1.31%
F-Score7
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | 5.86 | ||
| Debt/EBITDA | 3.71 | ||
| Cap/Depr | 36.24% | ||
| Cap/Sales | 6.68% | ||
| Interest Coverage | 3.82 | ||
| Cash Conversion | 83.57% | ||
| Profit Quality | 181.98% | ||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 1.17 |
F-Score7
WACC10.96%
ROIC/WACC0.44
Cap/Depr(3y)36.77%
Cap/Depr(5y)33.3%
Cap/Sales(3y)6.79%
Cap/Sales(5y)6.4%
Profit Quality(3y)601.21%
Profit Quality(5y)472.37%
High Growth Momentum
Growth
EPS 1Y (TTM)10.84%
EPS 3Y12.23%
EPS 5Y13.36%
EPS Q2Q%11.32%
EPS Next Y8.25%
EPS Next 2Y10.72%
EPS Next 3Y11.66%
EPS Next 5Y12.56%
Revenue 1Y (TTM)4.68%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%4.7%
Revenue Next Year1.35%
Revenue Next 2Y3.64%
Revenue Next 3Y4.56%
Revenue Next 5Y6.21%
EBIT growth 1Y7.77%
EBIT growth 3Y11.27%
EBIT growth 5Y17.46%
EBIT Next Year15.29%
EBIT Next 3Y11.59%
EBIT Next 5Y10.1%
FCF growth 1Y79.67%
FCF growth 3Y7.7%
FCF growth 5Y21.41%
OCF growth 1Y57.1%
OCF growth 3Y8.3%
OCF growth 5Y20.49%