GLOBAL PAYMENTS INC (GPN) Stock Fundamental Analysis
NYSE:GPN - New York Stock Exchange, Inc. - US37940X1028 - Common Stock - Currency: USD
GPN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
GPN had positive earnings in the past year.
In the past year GPN had a positive cash flow from operations.
Each year in the past 5 years GPN has been profitable.
In the past 5 years GPN always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of GPN (3.28%) is better than 67.33% of its industry peers.
GPN has a Return On Equity of 7.02%. This is comparable to the rest of the industry: GPN outperforms 45.54% of its industry peers.
With a decent Return On Invested Capital value of 4.84%, GPN is doing good in the industry, outperforming 64.36% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GPN is below the industry average of 7.77%.
The 3 year average ROIC (4.36%) for GPN is below the current ROIC(4.84%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.28% | ||
| ROE | 7.02% | ||
| ROIC | 4.84% |
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
The Profit Margin of GPN (15.48%) is better than 66.34% of its industry peers.
GPN's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 23.72%, GPN is in the better half of the industry, outperforming 70.30% of the companies in the same industry.
In the last couple of years the Operating Margin of GPN has grown nicely.
GPN has a Gross Margin of 62.77%. This is in the better half of the industry: GPN outperforms 75.25% of its industry peers.
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 | 23.72% | ||
| PM (TTM) | 15.48% | ||
| GM | 62.77% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GPN is destroying value.
The number of shares outstanding for GPN has been reduced compared to 1 year ago.
GPN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for GPN is higher compared to a year ago.
2.2 Solvency
GPN has an Altman-Z score of 0.97. This is a bad value and indicates that GPN is not financially healthy and even has some risk of bankruptcy.
GPN has a better Altman-Z score (0.97) than 60.40% of its industry peers.
The Debt to FCF ratio of GPN is 5.61, which is a neutral value as it means it would take GPN, 5.61 years of fcf income to pay off all of its debts.
GPN has a better Debt to FCF ratio (5.61) than 65.35% of its industry peers.
GPN has a Debt/Equity ratio of 0.71. This is a neutral value indicating GPN is somewhat dependend on debt financing.
The Debt to Equity ratio of GPN (0.71) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 5.61 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.69
WACC6.98%
2.3 Liquidity
GPN has a Current Ratio of 0.94. 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 Current ratio of 0.94 is in line compared to the rest of the industry. GPN outperforms 44.55% of its industry peers.
GPN has a Quick Ratio of 0.94. 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 0.94 is in line compared to the rest of the industry. GPN outperforms 47.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.80% over the past year.
Measured over the past years, GPN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.36% on average per year.
Looking at the last year, GPN shows a small growth in Revenue. The Revenue has grown by 3.23% in the last year.
Measured over the past years, GPN shows a quite strong growth in Revenue. The Revenue has been growing by 15.52% on average per year.
EPS 1Y (TTM)9.8%
EPS 3Y12.23%
EPS 5Y13.36%
EPS Q2Q%3.86%
Revenue 1Y (TTM)3.23%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%0.96%
3.2 Future
The Earnings Per Share is expected to grow by 9.75% on average over the next years. This is quite good.
Based on estimates for the next years, GPN will show a small growth in Revenue. The Revenue will grow by 6.01% on average per year.
EPS Next Y5.85%
EPS Next 2Y8.97%
EPS Next 3Y10.46%
EPS Next 5Y9.75%
Revenue Next Year1.52%
Revenue Next 2Y3.91%
Revenue Next 3Y5.28%
Revenue Next 5Y6.01%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 6.77, the valuation of GPN can be described as very cheap.
GPN's Price/Earnings ratio is rather cheap when compared to the industry. GPN is cheaper than 87.13% of the companies in the same industry.
When comparing the Price/Earnings ratio of GPN to the average of the S&P500 Index (27.24), we can say GPN is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 5.75, the valuation of GPN can be described as very cheap.
GPN's Price/Forward Earnings ratio is rather cheap when compared to the industry. GPN is cheaper than 84.16% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.42, GPN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.77 | ||
| Fwd PE | 5.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GPN is valued cheaper than 80.20% of the companies in the same industry.
92.08% of the companies in the same industry are more expensive than GPN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.38 | ||
| EV/EBITDA | 7.61 |
4.3 Compensation for Growth
GPN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
GPN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.16
PEG (5Y)0.51
EPS Next 2Y8.97%
EPS Next 3Y10.46%
5. Dividend
5.1 Amount
GPN has a Yearly Dividend Yield of 1.25%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.75, GPN has a dividend in line with its industry peers.
With a Dividend Yield of 1.25, GPN pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
5.2 History
On average, the dividend of GPN grows each year by 21.27%, which is quite nice.
GPN has paid a dividend for at least 10 years, which is a reliable track record.
GPN has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)21.27%
Div Incr Years0
Div Non Decr Years6
5.3 Sustainability
16.02% of the earnings are spent on dividend by GPN. This is a low number and sustainable payout ratio.
GPN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP16.02%
EPS Next 2Y8.97%
EPS Next 3Y10.46%
78.89
+0.85 (+1.09%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners94.25%
Inst Owner Change0.42%
Ins Owners0.53%
Ins Owner Change6.65%
Market Cap19.24B
Analysts69.47
Price Target99.22 (25.77%)
Short Float %3.47%
Short Ratio3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
Yearly Dividend0.99
Dividend Growth(5Y)21.27%
DP16.02%
Div Incr Years0
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.59%
Min EPS beat(2)-1.97%
Max EPS beat(2)-1.2%
EPS beat(4)1
Avg EPS beat(4)-1.36%
Min EPS beat(4)-2.29%
Max EPS beat(4)0.03%
EPS beat(8)3
Avg EPS beat(8)-0.7%
EPS beat(12)4
Avg EPS beat(12)-0.37%
EPS beat(16)7
Avg EPS beat(16)0.13%
Revenue beat(2)0
Avg Revenue beat(2)-1.25%
Min Revenue beat(2)-1.67%
Max Revenue beat(2)-0.82%
Revenue beat(4)0
Avg Revenue beat(4)-1.28%
Min Revenue beat(4)-1.96%
Max Revenue beat(4)-0.68%
Revenue beat(8)0
Avg Revenue beat(8)-0.95%
Revenue beat(12)4
Avg Revenue beat(12)2.05%
Revenue beat(16)8
Avg Revenue beat(16)4.11%
PT rev (1m)-0.39%
PT rev (3m)-11.83%
EPS NQ rev (1m)0.45%
EPS NQ rev (3m)-1.04%
EPS NY rev (1m)0.11%
EPS NY rev (3m)-0.66%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)0.59%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.77 | ||
| Fwd PE | 5.75 | ||
| P/S | 1.91 | ||
| P/FCF | 6.38 | ||
| P/OCF | 5.24 | ||
| P/B | 0.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.61 |
EPS(TTM)11.65
EY14.77%
EPS(NY)13.72
Fwd EY17.39%
FCF(TTM)12.36
FCFY15.67%
OCF(TTM)15.05
OCFY19.08%
SpS41.4
BVpS91.23
TBVpS-52.64
PEG (NY)1.16
PEG (5Y)0.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.28% | ||
| ROE | 7.02% | ||
| ROCE | 5.92% | ||
| ROIC | 4.84% | ||
| ROICexc | 5.2% | ||
| ROICexgc | 61.84% | ||
| OM | 23.72% | ||
| PM (TTM) | 15.48% | ||
| GM | 62.77% | ||
| FCFM | 29.85% |
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-Score8
Asset Turnover0.21
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 5.61 | ||
| Debt/EBITDA | 3.71 | ||
| Cap/Depr | 35.45% | ||
| Cap/Sales | 6.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.41% | ||
| Profit Quality | 192.89% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 0.97 |
F-Score8
WACC6.98%
ROIC/WACC0.69
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)9.8%
EPS 3Y12.23%
EPS 5Y13.36%
EPS Q2Q%3.86%
EPS Next Y5.85%
EPS Next 2Y8.97%
EPS Next 3Y10.46%
EPS Next 5Y9.75%
Revenue 1Y (TTM)3.23%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%0.96%
Revenue Next Year1.52%
Revenue Next 2Y3.91%
Revenue Next 3Y5.28%
Revenue Next 5Y6.01%
EBIT growth 1Y3.13%
EBIT growth 3Y11.27%
EBIT growth 5Y17.46%
EBIT Next Year11.34%
EBIT Next 3Y8.37%
EBIT Next 5Y9.19%
FCF growth 1Y89.38%
FCF growth 3Y7.7%
FCF growth 5Y21.41%
OCF growth 1Y65.87%
OCF growth 3Y8.3%
OCF growth 5Y20.49%