- GPN reported Q4 2021 earnings last week with EPS and revenue print coming in 1% ahead of consensus.
- The beat was driven primarily by its Merchant Solutions business which registered revenue growth of 21% YoY (vs our 18% estimate) as its tech-enabled businesses continue to outperform expectations.
- Q4 operating margin at 42% expanded 50bps YoY driven by ongoing operating leverage and synergies.
- Valuations for GPN remain undemanding, especially when compared to the networks (V and MA) and we use an NTM P/E of 20x (vs avg. of 21x) to arrive at a price target of $224, imputing an upside of 53% from current levels.
- Since we added Global Payments to our "Strong Buy" list in Nov 2021, shares have outperformed the broader S&P index by 16%. We Reiterate our "Strong Buy" rating on this best of breed payment processor.
For further details see:
Global Payments Delivers Q4 Results A Smidge Ahead Of Street Expectations - Reiterate Strong Buy