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How Should You Play Global Payments (GPN) Ahead of Q1 Earnings?
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Global Payments Inc. (GPN - Free Report) is slated to release first-quarter 2024 results on May 1, 2024, before the opening bell. The company continues to be aided by higher transaction volumes, strategic acquisitions, technological innovations and expanding international operations.
Q1 Estimates
The Zacks Consensus Estimate for GPN’s first-quarter earnings per share is pegged at $2.57, which indicates an improvement of 7.1% from the year-ago quarter’s reported figure.
The consensus mark for revenues is $2.2 billion, suggesting 6% growth from the year-ago quarter.
Impressive Price Performance
Shares of Global Payments have gained 21.9% in the past year compared with the industry’s 20.4% growth.
Image Source: Zacks Investment Research
Factors at Play
The top line of Global Payments is expected to have benefited on the back of its higher transaction volumes driven by steady consumer spending in the first quarter. Strong contributions from the Merchant Solutions and Issuer Solutions segments are likely to have contributed to the revenue growth of Global Payments in the quarter.
Merchant Solutions’ performance is likely to have benefited on the back of continued strength in its software-centric businesses, benefits derived from GPN-acquired Zego and AdvancedMD, and an expanding international presence in Spain, central Europe and Latin America. We expect adjusted revenues from this unit to improve 14.6% year over year in the first quarter.
The Issuer Solutions unit earns payment processing service revenues derived from GPN’s long-term processing contracts with financial institutions and other financial services providers. Likewise, in the to-be-reported quarter, the unit is likely to have been aided by a solid conversion pipeline and improved commercial account growth with its large FI partners. Commercial card transactions are likely to have witnessed an uptick, attributable to rebounding cross-border corporate travel. We expect the segment’s adjusted revenues to grow 5.5% year over year in the to-be-reported quarter.
Global Payments resorts to acquisitions, partnerships and joint ventures for enhancing capabilities, boosting business scale, expanding share across existing markets as well as stepping into new markets. Buyouts are prioritized by the management to allocate capital and the reason can be well attributed to the contributions that these initiatives make to the overall revenue growth and operational efficiencies. Our estimate for adjusted operating income of the Merchant Solutions and Issuer Solutions segments implies increases of 13.7% and 4.8%, respectively, on a year-over-year basis.
A strong financial stand, substantiated by a strong cash balance and operating cash flows, provides a cushion for GPN to pursue such growth-related efforts.
The pursuit of technology investments related to new product development and innovation efforts is aimed at upgrading the performance of operating platforms, diversifying technology and cloud-based solutions and driving cost efficiencies for Global Payments. The initiatives are expected to have borne fruits for the company in the form of lower overall operating expenses in the first quarter, which are expected to decline 10.8% year over year, per our model estimate. A decline in the cost of services is likely to have driven margins for the company in the to-be-reported quarter.
Earnings Prediction
Our proven model predicts an earnings beat for Global Payments this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is precisely the case here.
Global Payments has an Earnings ESP of +1.74% and a Zacks Rank of 3.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Solid Earnings Surprise History
Global Payments' bottom line beat estimates in each of the trailing four quarters, the average surprise being 2.04%.
Other Stocks to Consider
Here are some other companies from the Business Services space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for APG’s first-quarter 2024 earnings is pegged at 32 cents per share, indicating a rise of 28% from the year-ago quarter’s reported number.
APi Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 5.05%.
SPX Technologies, Inc. (SPXC - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for SPXC’s first-quarter 2024 earnings is pegged at $1.06 per share, which implies a 14% rise from the year-ago quarter’s reported figure.
SPX Technologies’ earnings beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 23.19%.
Envestnet, Inc. (ENV - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank of 3, at present. The Zacks Consensus Estimate for ENV’s first-quarter 2024 earnings is pegged at 54 cents per share, which indicates an improvement of 17.4% from the year-ago quarter’s reported figure.
Envestnet’s earnings beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.72%.
Image: Bigstock
How Should You Play Global Payments (GPN) Ahead of Q1 Earnings?
Global Payments Inc. (GPN - Free Report) is slated to release first-quarter 2024 results on May 1, 2024, before the opening bell. The company continues to be aided by higher transaction volumes, strategic acquisitions, technological innovations and expanding international operations.
Q1 Estimates
The Zacks Consensus Estimate for GPN’s first-quarter earnings per share is pegged at $2.57, which indicates an improvement of 7.1% from the year-ago quarter’s reported figure.
The consensus mark for revenues is $2.2 billion, suggesting 6% growth from the year-ago quarter.
Impressive Price Performance
Shares of Global Payments have gained 21.9% in the past year compared with the industry’s 20.4% growth.
Image Source: Zacks Investment Research
Factors at Play
The top line of Global Payments is expected to have benefited on the back of its higher transaction volumes driven by steady consumer spending in the first quarter. Strong contributions from the Merchant Solutions and Issuer Solutions segments are likely to have contributed to the revenue growth of Global Payments in the quarter.
Merchant Solutions’ performance is likely to have benefited on the back of continued strength in its software-centric businesses, benefits derived from GPN-acquired Zego and AdvancedMD, and an expanding international presence in Spain, central Europe and Latin America. We expect adjusted revenues from this unit to improve 14.6% year over year in the first quarter.
The Issuer Solutions unit earns payment processing service revenues derived from GPN’s long-term processing contracts with financial institutions and other financial services providers. Likewise, in the to-be-reported quarter, the unit is likely to have been aided by a solid conversion pipeline and improved commercial account growth with its large FI partners. Commercial card transactions are likely to have witnessed an uptick, attributable to rebounding cross-border corporate travel. We expect the segment’s adjusted revenues to grow 5.5% year over year in the to-be-reported quarter.
Global Payments resorts to acquisitions, partnerships and joint ventures for enhancing capabilities, boosting business scale, expanding share across existing markets as well as stepping into new markets. Buyouts are prioritized by the management to allocate capital and the reason can be well attributed to the contributions that these initiatives make to the overall revenue growth and operational efficiencies. Our estimate for adjusted operating income of the Merchant Solutions and Issuer Solutions segments implies increases of 13.7% and 4.8%, respectively, on a year-over-year basis.
A strong financial stand, substantiated by a strong cash balance and operating cash flows, provides a cushion for GPN to pursue such growth-related efforts.
The pursuit of technology investments related to new product development and innovation efforts is aimed at upgrading the performance of operating platforms, diversifying technology and cloud-based solutions and driving cost efficiencies for Global Payments. The initiatives are expected to have borne fruits for the company in the form of lower overall operating expenses in the first quarter, which are expected to decline 10.8% year over year, per our model estimate. A decline in the cost of services is likely to have driven margins for the company in the to-be-reported quarter.
Earnings Prediction
Our proven model predicts an earnings beat for Global Payments this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is precisely the case here.
Global Payments has an Earnings ESP of +1.74% and a Zacks Rank of 3.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Solid Earnings Surprise History
Global Payments' bottom line beat estimates in each of the trailing four quarters, the average surprise being 2.04%.
Other Stocks to Consider
Here are some other companies from the Business Services space, which according to our model, have the right combination of elements to beat on earnings this time around:
APi Group Corporation (APG - Free Report) currently has an Earnings ESP of +2.06% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for APG’s first-quarter 2024 earnings is pegged at 32 cents per share, indicating a rise of 28% from the year-ago quarter’s reported number.
APi Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 5.05%.
SPX Technologies, Inc. (SPXC - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for SPXC’s first-quarter 2024 earnings is pegged at $1.06 per share, which implies a 14% rise from the year-ago quarter’s reported figure.
SPX Technologies’ earnings beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 23.19%.
Envestnet, Inc. (ENV - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank of 3, at present. The Zacks Consensus Estimate for ENV’s first-quarter 2024 earnings is pegged at 54 cents per share, which indicates an improvement of 17.4% from the year-ago quarter’s reported figure.
Envestnet’s earnings beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.72%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.