Global Payments (GPN) Up 4.7% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Global Payments reported strong second-quarter earnings, driven by transaction growth and improved operating performance, although some segments missed consensus estimates [2][3][6][7]. Financial Performance - Adjusted EPS for Q2 2024 was $2.93, beating the Zacks Consensus Estimate of $2.91, and rose 11.8% year over year [2]. - Adjusted net revenues increased 5.5% year over year to $2.32 billion, surpassing the consensus mark of $2.31 billion [2]. - Adjusted operating income rose 6.4% year over year to $1.1 billion, exceeding the estimate of $1 billion, with an adjusted operating margin of 45.2% [4]. Operating Expenses - Total operating expenses were $2 billion, up 7.9% year over year, primarily due to higher selling, general and administrative expenses [5]. - Interest and other expenses decreased 16.9% year over year to $159.2 million [5]. Segment Performance - Merchant Solutions segment reported adjusted revenues of $1.81 billion, a 7.8% increase year over year, driven by double-digit growth in the ISV channel and over 20% growth in the LATAM region [6]. - Issuer Solutions segment had adjusted revenues of $526.5 million, growing 4.2% year over year but missing the consensus estimate [7]. Financial Position - As of June 30, 2024, cash and cash equivalents were $2.1 billion, total assets increased to $50.8 billion, and long-term debt decreased to $15.6 billion [8]. - Total equity declined to $23 billion from $23.3 billion at the end of 2023 [8]. Capital Deployment - The company repurchased shares worth $900 million in the first half of 2024 and declared a quarterly dividend of 25 cents per share [10]. 2024 Outlook - Adjusted net revenues are projected to be between $9.17 billion and $9.30 billion, indicating a 6-7% improvement from 2023 [11]. - Adjusted EPS is expected to be between $11.54 and $11.70, suggesting 11-12% growth from 2023 [12]. Market Position - Global Payments has a subpar Growth Score of D and a Momentum Score of F, but a value grade of B, placing it in the top 40% for this investment strategy [14]. - The stock has a Zacks Rank 3 (Hold), indicating an expected in-line return in the coming months [15].