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Global Payments Inc. (GPN - Free Report) pulled back sharply, but estimates keep climbing. That leaves this Zacks #1 Rank (Strong Buy) with good valuations to go along with double-digit growth rates.

Company Description

Global Payments provides electronic transaction processing for merchants, financial institutions, corporations, and other entities.

Revenue Jumps 23%

On Oct 4 Global Payments reported first-quarter results that included revenues of $543 million, a 23% increase since the first period last year. Earnings per share came out to $0.88, up 15 cents and 13 cents higher than the Zacks Consensus Estimate. The company has beat estimates 75% of the time in the past 5 years.

In the same release, the company raised its full-year guidance based on the strong performance and stock buy-back program. There are 3 main things to look for in an earnings report; the top line, the bottom line, and guidance. Global Payments pleased investors in all 3 areas.

Analysts Raise the Bar

Since the release, 21 of the 22 analysts have raised full-year estimates. The Zacks Consensus is up a dime to $3.19. Next year' average forecast is up 15 cents, to $3.60.

Last year Global Payments earned $2.77 per share, so the projected growth rates are at 15% and 13%, respectively.


Shares of GPN are going for 14 times forward estimates, which give the stock a PEG ratio of 1.1. The price to sales is at 1.7 and the price to book is just under 3 times.

The Chart

Global Payments has pulled back sharply, but the estimates are still climbing steadily year over year.

Global Payments  - ticker GPN>

Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service

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