It has been about a month since the last earnings report for Global Payments (GPN Quick QuoteGPN - Free Report) . Shares have lost about 12.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Global Payments due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Global Payments Q3 Earnings Beat, Ups '21 EPS View

Global Payments delivered third-quarter 2021 adjusted earnings per share (EPS) of $2.18, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 28% year over year.

Adjusted net revenues rose 15% year over year to $2 billion in the third quarter. The top line outpaced the consensus mark by 0.6%. Adjusted operating margin of 42.8% improved 170 basis points (bps) year over year in the quarter under review.

The company’s results benefited on the back of solid top-line growth driven by strong segmental contributions from its Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions segments. However, the quarterly results were partly offset by elevated operating costs.

Total operating expenses escalated 10.7% year over year to $1.8 billion due to rise in cost of service, and higher selling, general and administrative costs.

Segmental Performances

Merchant Solutions: Adjusted net revenues of this segment advanced 20.6% year over year to $1.4 billion in the quarter under review. Operating income of $669.5 million climbed 25.8% year over year.

Issuer Solutions: The segment reported adjusted net revenues of $457.8 million, which advanced 5.6% year over year. Operating income rose 5.8% year over year to $198.5 million in the third quarter.

Business and Consumer Solutions: Adjusted net revenues of this segment inched up 1.7% year over year to $207.7 million in the quarter under review. Operating income of $53.1 million increased 1.6% year over year.

Balance Sheet Position (as of Sep 30, 2021)

The company exited the third quarter with cash and cash equivalents of $2.3 billion, which rose 20.7% from the 2020-end level.

Long-term debt amounted to $10.7 billion, reflecting an increase of 26.5% from the figure as of Dec 31, 2020.

Shareholders’ equity of $26.1 billion declined 4.3% from the level at the 2020 end.

For the nine months ended Sep 30, 2021, net cash provided by operating activities climbed 31.3% from the prior-year comparable period to $2 billion.

Dividend Update

Management approved a quarterly dividend of 25 cents per share, which will be paid out on Dec 30, 2021 to shareholders of record as on Dec 16, 2021.

2021 Guidance Updated

The company now anticipates adjusted net revenues within $7.71-$7.73 billion for 2021 compared with the previous guidance of $7.70-$7.73 billion. The newly provided outlook continues to indicate 14-15% growth from the 2020 reported figure.

Adjusted EPS is estimated between $8.10 and $8.20, up from the prior view of $8.07-$8.20. The revised guidance suggests an improvement of 27-28% from the year-ago reported figure.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Global Payments has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Global Payments has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.