We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
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.
Should You Hold on to Total System (TSS) Stock Right Now?
Read MoreHide Full Article
Shares of Total System Services, Inc. gained 4.5% over the past three months, as against 1.4% loss for the Zacks categorized Financial Transaction Services industry.
It is difficult to get too excited about this stock given a number of concerns including the impact of the Consumer Financial Protection Bureau’s (CFPB) new rules on prepaid industry. However, looking at the company’s strong fundamentals, holding on to the stock might be a good idea for the investors.
Over the past 30 days, the Zacks Consensus Estimate for the stock remained unchanged at $2.64 for 2016 and $2.95 for 2017.
Factors to Influence the Stock Ahead
The Columbus, GA–based company continues to benefit from its long-term processing contracts as it focuses on retaining and acquiring clients. Further, it should benefit from the TransFirst acquisition which was completed in April this year. The acquisition strengthened Total System’s technology, scale, and distribution capabilities, as well as enhanced its access to high growth, strategically attractive vertical markets such as healthcare, business to business and not for profit.
Total System’s third-quarter 2016 results reflected solid growth in revenues. Notably, net revenue inched up 2.4% year over year in its North America segment. Further, it expects revenue growth for this segment to be at or slightly above 5% for the year.
Though the company reduced its overall net revenue guidance for 2016 in order to account for currency impact, the outlook still remains impressive. Revenues are expected in the range of $3.03–$3.05 billion, reflecting 21–22% growth.
Also, Total System reiterated its adjusted earnings per share guidance attributable to the company’s common shareholders from continuing operations in the range of $2.78–$2.85, but no longer expects the low-end of the range as previously projected.
Among others, free cash flow is expected in the range of $550–$570 million for the year, higher than the previous outlook of $510–$540 million.
However, impact of the CFPB’s new rules on prepaid released in Oct 2016, remains a key concern. Based on expected 2016 revenues, Total System estimates revenue loss between $80 million to $85 million due to the removal of certain fees and ceasing of optional overdraft protection on its current prepaid card programs. Also, with the Oct 1, 2017 implementation date, total revenue for 2017 will be negatively impacted by about $20–$25 million.
Among others, stiff competition and huge cash outlays on acquisition keep us cautious.
Total System carries a Zacks Rank #3 (Hold).
Stocks to Consider
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for the current year increased 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company sports a Zacks Rank #1 (Strong Buy).
Meta Financial Group, Inc. (CASH - Free Report) : The Zacks Consensus Estimate inched up 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Hold on to Total System (TSS) Stock Right Now?
Shares of Total System Services, Inc. gained 4.5% over the past three months, as against 1.4% loss for the Zacks categorized Financial Transaction Services industry.
It is difficult to get too excited about this stock given a number of concerns including the impact of the Consumer Financial Protection Bureau’s (CFPB) new rules on prepaid industry. However, looking at the company’s strong fundamentals, holding on to the stock might be a good idea for the investors.
Over the past 30 days, the Zacks Consensus Estimate for the stock remained unchanged at $2.64 for 2016 and $2.95 for 2017.
Factors to Influence the Stock Ahead
The Columbus, GA–based company continues to benefit from its long-term processing contracts as it focuses on retaining and acquiring clients. Further, it should benefit from the TransFirst acquisition which was completed in April this year. The acquisition strengthened Total System’s technology, scale, and distribution capabilities, as well as enhanced its access to high growth, strategically attractive vertical markets such as healthcare, business to business and not for profit.
Total System’s third-quarter 2016 results reflected solid growth in revenues. Notably, net revenue inched up 2.4% year over year in its North America segment. Further, it expects revenue growth for this segment to be at or slightly above 5% for the year.
Though the company reduced its overall net revenue guidance for 2016 in order to account for currency impact, the outlook still remains impressive. Revenues are expected in the range of $3.03–$3.05 billion, reflecting 21–22% growth.
Also, Total System reiterated its adjusted earnings per share guidance attributable to the company’s common shareholders from continuing operations in the range of $2.78–$2.85, but no longer expects the low-end of the range as previously projected.
Among others, free cash flow is expected in the range of $550–$570 million for the year, higher than the previous outlook of $510–$540 million.
However, impact of the CFPB’s new rules on prepaid released in Oct 2016, remains a key concern. Based on expected 2016 revenues, Total System estimates revenue loss between $80 million to $85 million due to the removal of certain fees and ceasing of optional overdraft protection on its current prepaid card programs. Also, with the Oct 1, 2017 implementation date, total revenue for 2017 will be negatively impacted by about $20–$25 million.
Among others, stiff competition and huge cash outlays on acquisition keep us cautious.
Total System carries a Zacks Rank #3 (Hold).
Stocks to Consider
E*TRADE Financial Corporation : Over the last 60 days, the Zacks Consensus Estimate for the current year increased 2.2% to $1.83 and advanced 6.9% to $1.87 for 2017. The company sports a Zacks Rank #1 (Strong Buy).
Virtus Investment Partners, Inc. (VRTS - Free Report) : The Zacks Consensus Estimate for 2016 climbed 6.7% to $5.75 and 20.7% for to $7.88 for 2017. The company also boasts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Meta Financial Group, Inc. (CASH - Free Report) : The Zacks Consensus Estimate inched up 11.8% for 2016 to $6.62 and 14.7% to $7.80 for 2017. The company sports a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>