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How Badly Will Coronavirus Hit Global Payments (GPN) Q1 Earnings?
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Global Payments Inc. (GPN - Free Report) is slated to report first-quarter 2020 results on May 6, before market open.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.52, indicating an increase of 13.4% from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $1.75 billion, suggesting a 67.35% surge from the year-ago quarter’s reported figure
Factors to Affect Q1 Results
The company disclosed that its businessperformance in January, February and through the first two weeks of March was better than its own expectation. However, its business started deteriorating toward March-end when large-scale lockdown and social distancing measures were adopted across North America and Europe to break the pandemic chain. The continued spread of this deadly virus to greater number of countries and localities is still hampering the company’s operations.
The spending slowdowns in the last two weeks of March were pronounced and broad-based across the company’s verticals including restaurants, gaming, travel (though consisting of small % of mix), etc.
We expect to see the maximum impact of the softness in spending in the Merchant segment, followed by with Issuer and Business & Consumer segments.
Global Payments expects first-quarter 2020 adjusted net revenues to be up slightly on a combined basis and adjusted earnings per share to grow approximately in mid-teens compared with the prior year on constant currency basis. In the first quarter of 2019, the company’s adjusted revenues and earnings per share grew 12.9% and 18.6%, respectively.
For the first quarter of 2020, the company’s projection for GAAP revenues and GAAP earnings per share is indicative of almost matching the figures reported in the fourth quarter of 2019. We note that in the same period, the Global Payments’ GAAP revenues soared 125.7% but EPS declined 27.7%.
Management also hinted at maintaining the company’s costs to protect margins since its top line is already under pressure.
Earnings Surprise History
The company flaunts a stellar earnings surprise history. Its bottom line surpassed estimates in all the trailing four quarters, the average being 2.42%. This is depicted in the chart below:
Our proven model does not predict 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. But this is not the case here.
Earnings ESP: Global Payments has an Earnings ESP of +0.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Global Payments carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some stocks worth considering from the finance sector with the perfect combination of elements to trump estimates this reporting cycle are as follows:
Green Dot Corporation (GDOT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +3.83%.
Repay Holdings Corporation (RPAY - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
How Badly Will Coronavirus Hit Global Payments (GPN) Q1 Earnings?
Global Payments Inc. (GPN - Free Report) is slated to report first-quarter 2020 results on May 6, before market open.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.52, indicating an increase of 13.4% from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $1.75 billion, suggesting a 67.35% surge from the year-ago quarter’s reported figure
Factors to Affect Q1 Results
The company disclosed that its businessperformance in January, February and through the first two weeks of March was better than its own expectation. However, its business started deteriorating toward March-end when large-scale lockdown and social distancing measures were adopted across North America and Europe to break the pandemic chain. The continued spread of this deadly virus to greater number of countries and localities is still hampering the company’s operations.
The spending slowdowns in the last two weeks of March were pronounced and broad-based across the company’s verticals including restaurants, gaming, travel (though consisting of small % of mix), etc.
We expect to see the maximum impact of the softness in spending in the Merchant segment, followed by with Issuer and Business & Consumer segments.
Global Payments expects first-quarter 2020 adjusted net revenues to be up slightly on a combined basis and adjusted earnings per share to grow approximately in mid-teens compared with the prior year on constant currency basis. In the first quarter of 2019, the company’s adjusted revenues and earnings per share grew 12.9% and 18.6%, respectively.
For the first quarter of 2020, the company’s projection for GAAP revenues and GAAP earnings per share is indicative of almost matching the figures reported in the fourth quarter of 2019. We note that in the same period, the Global Payments’ GAAP revenues soared 125.7% but EPS declined 27.7%.
Management also hinted at maintaining the company’s costs to protect margins since its top line is already under pressure.
Earnings Surprise History
The company flaunts a stellar earnings surprise history. Its bottom line surpassed estimates in all the trailing four quarters, the average being 2.42%. This is depicted in the chart below:
Global Payments Inc. Price and EPS Surprise
Global Payments Inc. price-eps-surprise | Global Payments Inc. Quote
What Our Quantitative Model Predicts
Our proven model does not predict 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. But this is not the case here.
Earnings ESP: Global Payments has an Earnings ESP of +0.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Global Payments carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some stocks worth considering from the finance sector with the perfect combination of elements to trump estimates this reporting cycle are as follows:
Virtu Financial, Inc. (VIRT - Free Report) has a Zacks Rank of 1 and an Earnings ESP of +39.67%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Green Dot Corporation (GDOT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +3.83%.
Repay Holdings Corporation (RPAY - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>