Total System Services, Inc. (TSS - Free Report) stock has been scaling the charts, courtesy of its focus on strategic growth initiatives, which have also helped highlighting the company’s impressive past record.
Estimates for Total System have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 moving 14.9% north to $4.17 and 13.5% up to $4.7, respectively, during this period.
Shares of this Zacks Rank #2 (Buy) player have outperformed its industry in a year’s time. The stock has soared 65.8% compared with the industry’s growth of 37.2%.
Let’s delve deeper into the factors that make Total System an attractive investment option.
Solid 2018 Guidance: The company expects net revenues in the range of $3.65-$3.75 billion, up 7-10% year over year. Adjusted EPS is projected at $4.10-$4.20, reflecting a rise of 22-25% year over year. For 2018, the company expects free cash flow between $770 million and $800 million (up 18.8% year over year). Its favorable earnings outlook instills investors' confidence in the stock.
Consistent Top-line Growth: Total System has seen consistent revenue growth over the past several years (CAGR of 27% from 2014 to 2017). The company should retain its revenue momentum in the coming quarters on the back of a strong market position and an impressive core business that continues to be driven by new deals, renewed agreements, accretive acquisitions and an expansion of service offerings.
Strong Capital Position: The company has a solid track of cash flows. It also remains committed to enhance shareholders’ value via a disciplined capital management. Over the last four years, the company has returned over $1 billion to shareholders in the form of share repurchases and dividends. Total System’s sturdy free cash flow and a deleveraging progress provides it with immense investment opportunity.
Positive Earnings Surprise History: Total System has an impressive earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the trailing four quarters with an average beat of 6.63%.
Attractive Valuation: Going by the price earnings (P/E) multiple, Total System is currently trading at a trailing 12-month P/E multiple of 22.4x, lower than the industry average of 24.7x
Other Stocks to Consider
A few other top-ranked stocks in the same space with a Zacks Rank of 2 are Visa Inc. (V - Free Report) , Mastercard Inc. (MA - Free Report) and Global Payments Inc. (GPN - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Visa’s earnings surpassed estimates in each of the last four quarters with an average positive surprise of 8.11%.
Mastercard’s earnings exceeded estimates in each of the trailing four quarters with an average beat of 5.99%.
Global Payments delivered positive surprises in each of the last four quarters with an average positive surprise of 4%.
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