Global Payments (GPN, Financial) has had a strong start to the new fiscal year. The company posted strong results in the first quarter. It showed solid improvements in earnings and revenue. Global Payments has also posted an upbeat outlook. With the future looking bright due to various strategies such as acquisitions, Global Payments is well on track for better times ahead. Let us have a look.
A robust performance
In the recently reported first quarter, Global Payments posted a good 12% improvement in the revenue amounting $704.9 million. This is better than $629.7 million that it posted in the same quarter last year. The results on the revenue also outpaced analysts’ estimates. On the earnings front, the company posted EPS of $1.22 topping consensus estimates of $1.15 per share.
Global Payments looks in good shape. The company is moving well on the stock exchange with its shares improving by more than 36% in the last one year. Global Payments justified its growth momentum delivering solid results in the recently reported quarter. The management of the company is further laser focusing on driving its profitability. It is focusing on various aspects. Global Payments is geared up for an expansion of its direct distribution all around the globe.
The way ahead
It is also planning to make acquisitions to improve long-term performance. The company has entered into an agreement to acquire Ezidebit. It is expecting this acquisition to yield handsome synergies in the coming quarters. In addition, Global Payments is also planning to stretch its footprint to the gaming segment as it is planning to acquire the gaming business of Fidelity National Information Services.
Global Payments wants to roll out well, and it is making efforts to drive its sales. These initiatives are taken, focusing mainly on driving its sales high in future. With the improving market conditions and technological advancements, there is a need for innovative solutions and Global Payments is confident of being in position to deliver such performance later this fiscal year.
Moreover, Global Payments has also announced full support for Apple (AAPL, Financial) Pay. As Apple Pay is a new category, transforming mobile payments with an easy and secure way to pay with iPhone 6 and iPhone 6 plus, this is an exciting opportunity for the company to drive its sales as the sales of iPhone 6 and 6 plus increases, Global Payments will have ample chances for driving good profitability in the near term.
Moving ahead, Global Payments is also seeing bright opportunities in the international markets as well. The company has great expectations from Canada, Spain and Britain where it delivered strong performance posting handsome contribution to top line from it. On the other hand, Global Payments is also looking forward to the positive contribution from the currency fluctuations in these regions.
Global Payments is pleased with the growth momentum it is seeing around its camp. It has taken some strong initiatives such as acquisition which are expected to drive good synergies in the future as well as the stretch in the gaming industry is also expected to be a wise move by Global Payments. It has also posted an upbeat outlook and is expecting full year earnings to fall in range of $4.65 to $4.75 per share which is a good increase and can attract many investors as it strengthens its long term prospects. While it is expecting the revenue to be in the range of $2.74 billion to $2.79 billion.
Conclusion
Now shifting focus to the fundamentals, considering current valuation levels, Global Payments is reasonable with trailing P/E of 23.28 and the earnings are growing well with a forward P/E of 15.88. its growing relationship with Apple Pay is expected to drive its market share as with the growth in the sales of iPhone 6 and iPhone 6 plus the company will see a growth in its service of secure payments and with Apple, Global Payments will have better market image which can also be a plus point for the company. Considering all these aspects as of now Global Payments is a good pick.
