A month has gone by since the last earnings report for Global Payments (GPN Quick QuoteGPN - Free Report) . Shares have added about 2.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Global Payments due for a pullback? 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 Q1 Top Mark on Solid Merchant Solutions

Global Payments reported first-quarter 2022 adjusted earnings per share (EPS) of $2.07, which surpassed the Zacks Consensus Estimate of $2.04. The bottom line also improved 13.7% from $1.82 per share a year ago.

Adjusted net revenues rose 7.7% year over year to $1,952.7 million for the first quarter from $1,812.2 million a year ago. The top line, however, missed the consensus mark of $1,961 million.

The electronics payment processing entity’s strong first-quarter earnings benefited from robust Merchant Solutions’ performance. The ongoing economic recovery aided GPN with a higher number of transactions despite a foreign-exchange volatility linked to the conflict in Ukraine. Higher operating expenses partially offset the positives.

Operating Performance

Adjusted operating margin of 41.1% improved 50 basis points (bps) year over year for the quarter under review.

Total operating expenses escalated 3.8% year over year to $1,780.3 million due to a 3.4% rise in the cost of service, and 4.3% higher selling, general and administrative costs.

Adjusted operating income rose 9.2% year over year to $802.5 million.

Segmental Performances

Merchant Solutions: Adjusted revenues of this segment advanced 16.3% year over year to $1,337.2 million for the quarter under review. Adjusted operating income of $632.1 million climbed 18.8% year over year on 18% global volume growth.

Issuer Solutions: The segment reported adjusted revenues of $442.5 million, which advanced 0.7% year over year. Adjusted operating income declined 0.6% year over year to $188.7 million for the first quarter.

Business and Consumer Solutions: Adjusted revenues of this segment declined 19.6% year over year to $195.8 million for the quarter under review. Adjusted operating income of $51.1 million decreased 36.8% year over year.

Financial Position (as of Mar 31, 2022)

Global Payments exited the first quarter with cash and cash equivalents of $2,045.3 million, which increased sequentially from $1,979.3 million.

Long-term debt amounted to $11,723.8 million, reflecting an increase from $11,414.8 million at fourth-quarter 2021-end. The current portion of long-term debt was $120.2 million at first-quarter-end.

Shareholders’ equity of $25.2 billion declined sequentially from $25.6 billion.

For the first quarter, net cash provided by operating activities climbed to $630 million from the prior-year comparable figure of $599.4 million.

Capital Deployment

Management approved a quarterly dividend of 25 cents per share, which will be paid out on Jun 24, 2022, to its shareholders of record as of Jun 10, 2022. GPN repurchased shares worth $649.7 million in the first quarter.

2022 Guidance

GPN reiterated adjusted net revenue guidance within $8.42-$8.50 billion for 2022, indicating an increase from the 2021 level of $7.74 billion. Global Payments expects low double-digit growth in Merchant Solutions revenues and mid-single digit growth in Issuer Solutions.

Adjusted EPS is estimated between $9.45 and $9.67, suggesting an increase of 16-19% from the 2021 reported figure of $8.16. GPN expects to convert almost 100% of adjusted net income into adjusted free cash flow.

Global Payments now expects 2022 adjusted operating margin to expand up to 125 basis points from the 2021 level of 41.8%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Global Payments has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Global Payments has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Global Payments is part of the Zacks Financial Transaction Services industry. Over the past month, Visa (V Quick QuoteV - Free Report) , a stock from the same industry, has gained 1.7%. The company reported its results for the quarter ended March 2022 more than a month ago.

Visa reported revenues of $7.19 billion in the last reported quarter, representing a year-over-year change of +25.5%. EPS of $1.79 for the same period compares with $1.38 a year ago.

For the current quarter, Visa is expected to post earnings of $1.73 per share, indicating a change of +16.1% from the year-ago quarter. The Zacks Consensus Estimate has changed 0% over the last 30 days.

Visa has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.