We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Global Payments Stock Drops 6.5% as 2025 Outlook Spooks Investors
Read MoreHide Full Article
Shares of Global Payments Inc. (GPN - Free Report) dropped 6.5% yesterday following its downbeat outlook. The company is planning to streamline its operations further to build a more unified operating business. GPN intends to concentrate its investments while maximizing the potential of the company’s portfolios. It expects 2025 to be a transition year for the company.
Now, let’s take a closer look at its outlook and strategic targets.
GPN’s Outlook vs. Consensus Estimates
Global Payments is aiming for adjusted net revenue growth, excluding dispositions, in the mid-single-digit percentage range for 2025. This is slightly below the Zacks Consensus Estimate, which was expecting around 7% growth year over year. The company expects elevated revenue growth of mid-to-high single digits for the 2026-2027 period.
In terms of profitability, it expects adjusted earnings per share growth of around 10% for 2025. In contrast, the consensus estimate predicts a 13.1% year-over-year increase for the same year. It anticipates the bottom line to grow by low teens percentage in the 2026-2027 period.
For 2025, GPN expects the adjusted operating margin to expand more than 50 basis points (bps). Adjusted operating margin for the 2026-2027 period is expected to increase 50-100 bps.
GPN’s Divestures
The company doesn’t shy away from getting rid of non-core operations. GPN sold Netspend business back to its founders for $1 billion last year to move away from the consumer side of the business and focus on business-to-business or B2B clients. Looking ahead, Global Payments has identified potential divestitures, which account for annual adjusted net revenues of $500-$600 million. Also, some limited tuck-in merger and acquisition activities are expected from the company.
GPN foresees its transformation and streamlining efforts to deliver more than $500 million of run-rate operating income benefits by the first half of 2027. While 30% of the benefits are expected to be achieved next year, the rest will likely come in the 2026-2027 period. However, the company expects the one-time costs to be two-thirds of the benefits.
GPN’s Other Targets
The company is likely to keep capital expenditure in the 7-8% range of its adjusted net revenues.
Investors are noticing its shareholder value boosting efforts. GPN is aiming at more than $2 billion of share buybacks per annum. It plans to return more than $7.5 billion of capital in the next three years. GPN bought back shares worth $900 million in the first half of 2024.
Global Payments’ cash-generating ability will support its shareholder-friendly moves. This Zacks Rank #3 (Hold) company expects to generate $8.5-$9 billion in cumulative free cash flow in the next three years. It generated $2.5 billion in adjusted free cash flow last year.
GPN’s Price Performance
Investors will continue to keep a close eye on how successfully the company manages its costs and margins during this transition period. In the past year, Global Payments’ shares have lost 13.2% against the industry’s 23.3% growth.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year increase. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The consensus estimate for Paysign’s current-year earnings indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year revenues is pegged at $58 million, implying 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 8%. The consensus estimate for current-year revenues implies 31.8% year-over-year growth.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Global Payments Stock Drops 6.5% as 2025 Outlook Spooks Investors
Shares of Global Payments Inc. (GPN - Free Report) dropped 6.5% yesterday following its downbeat outlook. The company is planning to streamline its operations further to build a more unified operating business. GPN intends to concentrate its investments while maximizing the potential of the company’s portfolios. It expects 2025 to be a transition year for the company.
Now, let’s take a closer look at its outlook and strategic targets.
GPN’s Outlook vs. Consensus Estimates
Global Payments is aiming for adjusted net revenue growth, excluding dispositions, in the mid-single-digit percentage range for 2025. This is slightly below the Zacks Consensus Estimate, which was expecting around 7% growth year over year. The company expects elevated revenue growth of mid-to-high single digits for the 2026-2027 period.
In terms of profitability, it expects adjusted earnings per share growth of around 10% for 2025. In contrast, the consensus estimate predicts a 13.1% year-over-year increase for the same year. It anticipates the bottom line to grow by low teens percentage in the 2026-2027 period.
For 2025, GPN expects the adjusted operating margin to expand more than 50 basis points (bps). Adjusted operating margin for the 2026-2027 period is expected to increase 50-100 bps.
GPN’s Divestures
The company doesn’t shy away from getting rid of non-core operations. GPN sold Netspend business back to its founders for $1 billion last year to move away from the consumer side of the business and focus on business-to-business or B2B clients. Looking ahead, Global Payments has identified potential divestitures, which account for annual adjusted net revenues of $500-$600 million. Also, some limited tuck-in merger and acquisition activities are expected from the company.
GPN foresees its transformation and streamlining efforts to deliver more than $500 million of run-rate operating income benefits by the first half of 2027. While 30% of the benefits are expected to be achieved next year, the rest will likely come in the 2026-2027 period. However, the company expects the one-time costs to be two-thirds of the benefits.
GPN’s Other Targets
The company is likely to keep capital expenditure in the 7-8% range of its adjusted net revenues.
Investors are noticing its shareholder value boosting efforts. GPN is aiming at more than $2 billion of share buybacks per annum. It plans to return more than $7.5 billion of capital in the next three years. GPN bought back shares worth $900 million in the first half of 2024.
Global Payments’ cash-generating ability will support its shareholder-friendly moves. This Zacks Rank #3 (Hold) company expects to generate $8.5-$9 billion in cumulative free cash flow in the next three years. It generated $2.5 billion in adjusted free cash flow last year.
GPN’s Price Performance
Investors will continue to keep a close eye on how successfully the company manages its costs and margins during this transition period. In the past year, Global Payments’ shares have lost 13.2% against the industry’s 23.3% growth.
Image Source: Zacks Investment Research
Better-Ranked Picks
Investors can look at some better-ranked stocks from the broader Business Services space, like Fidelity National Information Services, Inc. (FIS - Free Report) , Paysign, Inc. (PAYS - Free Report) and Remitly Global, Inc. (RELY - Free Report) . While Fidelity National currently sports a Zacks Rank #1 (Strong Buy), Paysign and Remitly Global each carry a Zacks Rank # 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year increase. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The consensus estimate for Paysign’s current-year earnings indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year revenues is pegged at $58 million, implying 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 8%. The consensus estimate for current-year revenues implies 31.8% year-over-year growth.