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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Global Payments Inc. (XNYS:GPN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GPN
Name:
GLOBAL PAYMENTS INC. (XNYS:GPN)
Sector:
473.90M
Industry:
Specialty Business Services
CEO:
Mr. Jeffrey Sloan
Total Employees:
25,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -123.08% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GLOBAL PAYMENTS INC.(GPN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY BUSINESS SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
124.05
One Month Price Target:
$124.76
Six Month Price Target :
$128.32
Likely Price in One Year's Time:
Ticker:
$132.6
Likely Trading Range Today Under (Normal Volatility)
$123.46
Price Upper limit ($) :
$124.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$117.14
This week:
$108.6
This month :
$93.15
Other Primary facts
Market Cap:
35.01B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
277.16M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.68%
-19.17%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$156.14
$141.59
$91.96
$106.51
Medium risk (<10%) entry points
Buy Call
Sell Call
$136.86
Buy Put:
Sell Put:
$133.75
$111.20
$114.35
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GPN
Sharpe Ratio:
-0.83%
Comparison:
GPN, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -240.45% lower than the industry
& is -136.29% lower than the market/S&P 500 average
Average Returns/Yield of
GPN
Daily returns:
-0.01%
Weekly returns:
-0.07%
Monthly returns:
-0.27%
Yearly returns:
5.18%
Comparison of returns:
Average annual returns/yield (last 3 years) is -162.67% below industry average
Classification:
GPN, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
GPN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.71%
Weekly Volatility:
6.05%
Monthly Volatility:
12.10%
Yearly Volatility:
41.91%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.49%
Volatility in last five trading days has been -81.94% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.57%
Weekly VaR:
-12.45%
Monthly VaR:
-24.91%
How Much Can the price of
GPN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-86.29%
This translates to price declining to:
$96.53
This translates to price declining to:
$17.01
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
GPN is a 75.81% riskier investment compared to the market/S&P 500 & is 50.61% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 2.85% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GPN
Beta in relation to market/S&P 500--1.03
Expected beta in 1 year's time:
0.887
Expected beta in 3 year's time:
1.254
Unlevered (debt free) Beta:
0.741
Beta in relation to Nasdaq (XNAS):
1.01
Beta in relation to all global stocks::
1.038
Beta Comparison & Analysis
Beta of competitors/peers::
1.087
Beta is -5.71% lower than peers
Average Industry Beta:
1.172
Beta is -12.52% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.71%
Sustainable growth rate is -92.30% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.134
Alpha is 123.81% above industry average alpha yield
Alpha is -854% below the market average
Analysis of Cost of Capital of
GPN
Equity cost of capital:
0.102
Equity cost of capital is -9.00% below industry mean WACC
Unlevered (without debt) cost of capital:
7.35%
Before-tax cost of debt:
2.79%
After-tax cost of debt:
2.20%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.20%
WACC is 2.01% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$31.35
Revenue growth rate per share of (3Y):
1.35
Annual revenue growth rate is 795.77% above the industry average
EPS:
$3.49
Expected Annual growth rate of EPS (3Y):
14.88%
Expected future EPS growth rate is 107.23% higher than the Specialty Business Services industry
Free cash flow (FCF) per share:
$7.95
Balance sheet equity growth per share: 2132.71%
Equity growth rate per share is 572.72% higher than the industry
Debt per share
$42.30
EBITDA per share
$11.73
Valuation Analysis Today of
GPN
P/E Ratio:
674
P/E Ratio of Competitors/Peers:
27.06
P/E ratio is 2390.37% higher than main peers & is 2314.29% higher than the industry
Stock price/value with industry average P/E ratio: $97.43
GPN is 27.32% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $99.71
Present value of the expected future dividends only: $13.98
P/S (Price to Sales ratio):
3.96
Price to sales ratio is 13.05% above the industry mean
P/B (Price to book value ratio):
1.35
Price to free cash flow: 15.61
Price to free cash flow ratio is -46.99% lower than the industry
Net income growth rate (3Y):
16.25%
Net income growth rate is -100.00% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.93%
Dividend yeild: 0.81%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $1.00
Expected next dividend best case: $0.27
Expected next dividend worst case: $0.23
Average dividend payment (long-term): $0.22
Average dividend increase/decrease (growth rate) % per period: 2.82%
Expected next dividend payment date: 22/09/2022
Expected next dividend record date: 09/08/2022
-
Previous dividend payment date: 24/06/2022
Previous dividend record date: 06/10/2022
-
Dividend History:
2022-06-09--$0.25
2021-12-15--$0.25
2021-06-10--$0.20
2022-03-10--$0.25
2021-09-09--$0.25
2021-03-11--$0.20
Dividend growth rate is -76.67% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
46.60%
Net debt to equity ratio:
40.92%
Debt to assets ratio:
25.80%
Net debt to assets ratio:
22.66%
Debt-to-asset ratio is -58.49% below industry average
Ability to repay debt:
Interest coverage ratio:
9.46
Interest coverage ratio is 155.44% more than industry average
Looking forward:
Debt growth rate:
23.83%
Annual debt growth is 925% higher than industry average debt growth rate
Debt repayment rate in last quarter: 9.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.768
Statistical significance of correlation:
GPN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.646
Stock price is 19.03% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.646
Correlation of price movement with Nasdaq (^IXIC):
-0.001
Covariance of price movement with the market:
-0.001
Kurtosis
11.957
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.308
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
GPN
Gross Profit Margin Ratio:
225%
Operating Profit Margin Ratio:
16.80%
Operating profit margin is 50.00% higher than the industry
Net Profit Margin Ratio:
225%
Effective Tax Rate:
17.71%
Effective tax rate is 1.40% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.03%
Return on equity (ROE) is -87.87% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.23%
Return on assets (ROA) is -62.45% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.06
Current ratio is -47.09% below industry average
Cash Conversion Cycle (days):
40.5
Cash conversion cycle is 55.39% above industry average
The remaining useful life of property plant & equipment is: 25.1 years
Stock based compensation to net income ratio:
3.79%
In-depth Efficiency Analysis
Revenue generated per employee:
347.6K
Each employee generates 26% more revenue than industry average revenue per employee
EBITDA generated per employee:
130.1K
Each employee generates 48% more EBITDA than industry average revenue per employee
Profit generated per employee:
40.5K
Each employee generates -19% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
19.0K
Each employee generates 35% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.6M
Each employee generates 35% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GPN
Enbridge Inc. (XNYS:ENBA)
L3HARRIS TECHNOLOGIES, INC. (XNYS:LHX)
REPUBLIC SERVICES, INC. (XNYS:RSG)
Trane Technologies plc (XNYS:TT)
PARKER-HANNIFIN CORPORATION (XNYS:PH)
ROPER TECHNOLOGIES, INC. (XNYS:ROP)
FERGUSON PLC (XNYS:FERG)
ROCKWELL AUTOMATION, INC. (XNYS:ROK)
IHS Markit Ltd. (XNYS:INFO)
Current Analyst Ratings
Strong buy�46%
Buy�63%
Hold�29%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.69B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.81B
4.88B
-
-
3.42B
-
-
3.42B
16.80M
343.79M
1.69B
3.25B
1.46B
1.01B
1.13B
200.58M
1.01B
Statement of Cash Flow
Date:
Period:
428.67M
Differed Income Tax :
- 80841.00K
Stock Based Compensation :
38.40M
Change in Working Capital :
- 76520.00K
Accounts Receivables:
- 34191.00K
Other Working Capital:
48.20M
Other Non-Cash Items:
70.65M
Net Cash Provided by Operating Activities:
630.00M
Investments in PP&E:
-
Net Acquisitions:
- 4726.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.05B
-
2.05B
972.96M
-
2.13B
5.15B
1.72B
24.79B
11.29B
-
22.75M
2.46B
40.28B
-
45.44B
-
617.57M
-
-
4.25B
4.87B
11.72B
723.50M
15.17B
-
20.04B
-
3.07B
- 247205.0K
-
March 31, 2022 at 6:00:00 AM
7.23B
25.16B
45.20B
-
12.34B
10.3B
-
- 156097.00K
- 160823.00K
- 1176496.00K
-
- 649654.00K
- 70243.00K
1.52B
- 376334.00K
- 36147.00K
56.70M
2.18B
2.12B
630.00M
- 156102.00K
473.90M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
GPN
2023
2024
2025
2026
2027
$133.26
$839.71
$897.57
$959.42
$1,025.53