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Global Payments Hits 52-Week High: Is Further Upside Left?
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Global Payments Inc. (GPN - Free Report) stock has gained traction from a strong second-quarter 2018 earnings release, raised EPS guidance and the announcement of acquiring AdvancedMD. The stock hit a 52 week-high of $121.43 on Aug 23 before closing a tad lower at $120.38.
The company came up with second-quarter 2018 adjusted earnings of $1.29 per share, beating the Zacks Consensus Estimate of $1.22 by 5.7% and surging nearly 37% year over year.
Since the company’s release of second-quarter results on Jun 30, 2018, shares have rallied nearly 8%, outperforming the industry’s growth of 4.7%. While in a year’s time, the stock has returned 29%, underperforming the industry’s rise of 35.1%.
What is Driving the Stock?
This payment technology and software solutions provider rides high on a consistently strong top line, witnessing a CAGR of 12.8% from 2007 to 2017. This momentum continued into the first half of 2018 as well. The company reported solid- second-quarter results, surging 37% year over year, mainly driven by an ongoing business impetus as well as the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.
All three segments of the company, namely North America, Europe and Asia-Pacific showed substantial growth in the second quarter. During the first half of 2018, total operating expenses decreased 8.3% year over year. Investors also sound confident about this decline in expenditures.
Moreover, the company has completed the refinancing of its corporate credit facilities this June, which reduced the interest rate spread. This in turn, also boosted its revolver capacity by $250 million.
Shares must have been driven by the announcement of AdvancedMD buyout, which is expected to expand its technological capabilities. This will further help the company fortify its own software portfolio and align with its software-driven strategy.
Is Further Room for Improvement Left?
Following its solid Q2 earnings, the company has raised its 2018 guidance. Adjusted earnings are now predicted in the range of $5.05-$5.20 compared with the earlier projection of $5-$5.20 per share. This upbeat outlook lends a positive insight into the company’s performance, which should support the rise in stock price.
The company's long-term growth rate is projected at 17.2%, outpacing the industry's 12.8% rate. Moreover, the company has witnessed its Zacks Consensus Estimate for 2018 and 2019 earnings move 1.4% and 0.5% north, respectively, over the past 30 days. All these factors are likely to lend the stock a good shape going forward.
Zacks Rank & Stocks to Consider
Global Payments carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same sector are Total System Services, Inc. , Evertec, Inc. (EVTC - Free Report) and Cardtronics PLC .
Total System provides payment processing, merchant and related payment services to financial and nonfinancial institutions worldwide. It carries a Zacks Rank #2 (Buy). In the trailing four quarters, the stock pulled off an average positive surprise of 7.7%.
EVERTEC, Inc. engages in transaction processing business, serving financial institutions, merchants, corporations and government agencies in Latin America and the Caribbean. With a Zacks Rank of 2, the company came up with an average earnings surprise of 11.84% over the last three of the four quarters.
Cardtronics provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. This Zacks Rank #1 (Strong Buy) stock managed to deliver an average trailing four-quarter beat of 27.17%. You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Global Payments Hits 52-Week High: Is Further Upside Left?
Global Payments Inc. (GPN - Free Report) stock has gained traction from a strong second-quarter 2018 earnings release, raised EPS guidance and the announcement of acquiring AdvancedMD. The stock hit a 52 week-high of $121.43 on Aug 23 before closing a tad lower at $120.38.
The company came up with second-quarter 2018 adjusted earnings of $1.29 per share, beating the Zacks Consensus Estimate of $1.22 by 5.7% and surging nearly 37% year over year.
Since the company’s release of second-quarter results on Jun 30, 2018, shares have rallied nearly 8%, outperforming the industry’s growth of 4.7%. While in a year’s time, the stock has returned 29%, underperforming the industry’s rise of 35.1%.
What is Driving the Stock?
This payment technology and software solutions provider rides high on a consistently strong top line, witnessing a CAGR of 12.8% from 2007 to 2017. This momentum continued into the first half of 2018 as well. The company reported solid- second-quarter results, surging 37% year over year, mainly driven by an ongoing business impetus as well as the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.
All three segments of the company, namely North America, Europe and Asia-Pacific showed substantial growth in the second quarter. During the first half of 2018, total operating expenses decreased 8.3% year over year. Investors also sound confident about this decline in expenditures.
Moreover, the company has completed the refinancing of its corporate credit facilities this June, which reduced the interest rate spread. This in turn, also boosted its revolver capacity by $250 million.
Shares must have been driven by the announcement of AdvancedMD buyout, which is expected to expand its technological capabilities. This will further help the company fortify its own software portfolio and align with its software-driven strategy.
Is Further Room for Improvement Left?
Following its solid Q2 earnings, the company has raised its 2018 guidance. Adjusted earnings are now predicted in the range of $5.05-$5.20 compared with the earlier projection of $5-$5.20 per share. This upbeat outlook lends a positive insight into the company’s performance, which should support the rise in stock price.
The company's long-term growth rate is projected at 17.2%, outpacing the industry's 12.8% rate. Moreover, the company has witnessed its Zacks Consensus Estimate for 2018 and 2019 earnings move 1.4% and 0.5% north, respectively, over the past 30 days. All these factors are likely to lend the stock a good shape going forward.
Zacks Rank & Stocks to Consider
Global Payments carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same sector are Total System Services, Inc. , Evertec, Inc. (EVTC - Free Report) and Cardtronics PLC .
Total System provides payment processing, merchant and related payment services to financial and nonfinancial institutions worldwide. It carries a Zacks Rank #2 (Buy). In the trailing four quarters, the stock pulled off an average positive surprise of 7.7%.
EVERTEC, Inc. engages in transaction processing business, serving financial institutions, merchants, corporations and government agencies in Latin America and the Caribbean. With a Zacks Rank of 2, the company came up with an average earnings surprise of 11.84% over the last three of the four quarters.
Cardtronics provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. This Zacks Rank #1 (Strong Buy) stock managed to deliver an average trailing four-quarter beat of 27.17%. You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>