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Global Payments (GPN) Surges 13.0%: Is This an Indication of Further Gains?

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Global Payments (GPN - Free Report) shares ended the last trading session 13% higher at $96.84. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.8% gain over the past four weeks.

Global Payments retained its rally for the third straight day, driven by strength in its diversified payment technology solutions, enterprise software and commerce enablement services that simplify transactions and improve business efficiency. Its extensive global footprint and distribution network support market penetration and geographic diversification. Scalable technology infrastructure facilitates operating efficiencies, while longstanding relationships with financial institutions and technology partners strengthen its reach.

Moreover, the stock witnessed a price rise on Oct 30, following reports that private equity firms Clayton, Dubilier & Rice (CD&R) and GTCR were exploring a potential acquisition of Global Payments. However, discussions remain preliminary, and no definitive agreement has been announced.

This electronics payment processing company is expected to post quarterly earnings of $3.57 per share in its upcoming report, which represents a year-over-year change of +9.5%. Revenues are expected to be $3.18 billion, up 31% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Global Payments, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on GPN going forward to see if this recent jump can turn into more strength down the road.

 

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Global Payments is a member of the Zacks Financial Transaction Services industry. One other stock in the same industry, DLocal (DLO - Free Report) , finished the last trading session 5.1% lower at $12.96. DLO has returned -0.6% over the past month.

For DLocal, the consensus EPS estimate for the upcoming report has changed -5.8% over the past month to $0.22. This represents a change of +29.4% from what the company reported a year ago. DLocal currently has a Zacks Rank of #3 (Hold).

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