GLOBAL PAYMENTS INC (GPN) Stock Fundamental Analysis
NYSE:GPN - New York Stock Exchange, Inc. - US37940X1028 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to GPN. GPN was compared to 99 industry peers in the Financial Services industry. GPN scores excellent on profitability, but there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GPN.
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.
In the past 5 years GPN always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.28%, GPN is doing good in the industry, outperforming 66.67% of the companies in the same industry.
GPN has a Return On Equity of 7.02%. This is comparable to the rest of the industry: GPN outperforms 44.44% of its industry peers.
The Return On Invested Capital of GPN (4.84%) is better than 62.63% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GPN is significantly below the industry average of 11.83%.
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
Looking at the Profit Margin, with a value of 15.48%, GPN is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
In the last couple of years the Profit Margin of GPN has grown nicely.
GPN's Operating Margin of 23.72% is fine compared to the rest of the industry. GPN outperforms 69.70% of its industry peers.
GPN's Operating Margin has improved in the last couple of years.
The Gross Margin of GPN (62.77%) is better than 76.77% of its industry peers.
GPN's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GPN is destroying value.
GPN has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, GPN has less shares outstanding
The debt/assets ratio for GPN is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.97, we must say that GPN is in the distress zone and has some risk of bankruptcy.
GPN's Altman-Z score of 0.97 is fine compared to the rest of the industry. GPN outperforms 61.62% 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.
With a decent Debt to FCF ratio value of 5.61, GPN is doing good in the industry, outperforming 64.65% of the companies in the same industry.
A Debt/Equity ratio of 0.71 indicates that GPN is somewhat dependend on debt financing.
GPN has a Debt to Equity ratio of 0.71. This is comparable to the rest of the industry: GPN outperforms 53.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 5.61 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.65
WACC7.45%
2.3 Liquidity
A Current Ratio of 0.94 indicates that GPN may have some problems paying its short term obligations.
GPN has a Current ratio of 0.94. This is comparable to the rest of the industry: GPN outperforms 44.44% 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 has a Quick ratio (0.94) which is comparable to the rest of the industry.
| 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.
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 3.23%.
The Revenue has been growing by 15.52% on average over the past years. This is quite good.
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
GPN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.75% yearly.
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 Y5.7%
EPS Next 2Y8.95%
EPS Next 3Y10.53%
EPS Next 5Y9.75%
Revenue Next Year1.35%
Revenue Next 2Y3.83%
Revenue Next 3Y4.95%
Revenue Next 5Y6.01%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
With a Price/Earnings ratio of 6.93, the valuation of GPN can be described as very cheap.
Based on the Price/Earnings ratio, GPN is valued cheaper than 84.85% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.53, GPN is valued rather cheaply.
A Price/Forward Earnings ratio of 5.89 indicates a rather cheap valuation of GPN.
Based on the Price/Forward Earnings ratio, GPN is valued cheaper than 82.83% of the companies in the same industry.
GPN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.93 | ||
| Fwd PE | 5.89 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GPN indicates a rather cheap valuation: GPN is cheaper than 80.81% of the companies listed in the same industry.
90.91% 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 | 6.53 | ||
| EV/EBITDA | 7.66 |
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)1.22
PEG (5Y)0.52
EPS Next 2Y8.95%
EPS Next 3Y10.53%
5. Dividend
5.1 Amount
GPN has a Yearly Dividend Yield of 1.32%. Purely for dividend investing, there may be better candidates out there.
GPN's Dividend Yield is a higher than the industry average which is at 4.93.
With a Dividend Yield of 1.32, GPN pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.32% |
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.
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 16.02% of its income as dividend. This is a sustainable payout ratio.
The dividend of GPN is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP16.02%
EPS Next 2Y8.95%
EPS Next 3Y10.53%
80.73
+1.78 (+2.25%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners93.41%
Inst Owner Change0.37%
Ins Owners0.85%
Ins Owner Change6.64%
Market Cap19.69B
Analysts69.73
Price Target100.39 (24.35%)
Short Float %3.04%
Short Ratio1.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.32% |
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)-6.87%
PT rev (3m)-25.02%
EPS NQ rev (1m)-1.52%
EPS NQ rev (3m)-2.27%
EPS NY rev (1m)-0.81%
EPS NY rev (3m)-2.35%
Revenue NQ rev (1m)0.38%
Revenue NQ rev (3m)0.34%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.93 | ||
| Fwd PE | 5.89 | ||
| P/S | 1.95 | ||
| P/FCF | 6.53 | ||
| P/OCF | 5.36 | ||
| P/B | 0.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.66 |
EPS(TTM)11.65
EY14.43%
EPS(NY)13.71
Fwd EY16.98%
FCF(TTM)12.36
FCFY15.31%
OCF(TTM)15.05
OCFY18.65%
SpS41.4
BVpS91.23
TBVpS-52.64
PEG (NY)1.22
PEG (5Y)0.52
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
WACC7.45%
ROIC/WACC0.65
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 Y5.7%
EPS Next 2Y8.95%
EPS Next 3Y10.53%
EPS Next 5Y9.75%
Revenue 1Y (TTM)3.23%
Revenue growth 3Y5.84%
Revenue growth 5Y15.52%
Sales Q2Q%0.96%
Revenue Next Year1.35%
Revenue Next 2Y3.83%
Revenue Next 3Y4.95%
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%