Global Payments Inc. (GPN): A Bull Case Theory

We came across a bullish thesis on Global Payments Inc. on Value investing subreddit by logical-dreamer. In this article, we will summarize the bulls’ thesis on GPN. Global Payments Inc.'s share was trading at $75.76 as of November 28th. GPN’s trailing and forward P/E were 11.50 and 5.61 respectively according to Yahoo Finance.

Global Payments Inc. provides payment technology and software solutions for card, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific. GPN has recently pulled back from around $84 to $74, creating what appears to be an attractive entry point given its solid fundamental performance.

The company delivered a mostly upbeat earnings print, with EPS rising roughly 12% year over year and revenue growing in the mid-single digits, demonstrating steady underlying demand. At current levels, the stock trades at a compelling 7–8× forward earnings and generates an estimated 12% free cash flow yield, suggesting meaningful value for long-term investors.

However, the pressure on the share price is driven largely by its sizeable debt load. With $13.6 billion of debt against an $18 billion market cap, the company is far more leveraged than its headline valuation implies. Rising interest costs are weighing on profitability, as roughly $600 million of interest expense consumed a notable portion of the company’s $2.5 billion in operating income. This leverage, combined with a moderating topline, has led investors to discount the stock despite otherwise stable fundamentals.

Still, Global Payments is actively positioning itself for long-term growth through its acquisition of EVO Payments, designed to accelerate its shift toward a more technology-enabled, software-centric business model. If execution improves and debt is gradually reduced, the current valuation could represent a compelling opportunity, given the company’s durable cash generation and potential for enhanced operating leverage once financing burdens ease.

Previously we covered a bullish thesis on Global Payments Inc. (GPN) by Excelsior Capital in November 2024, which highlighted steady EPS growth and strong long-term fundamentals. The company's stock price has depreciated approximately by 35.29% since our coverage. This is because the thesis didn’t fully play out amid market concerns. The thesis still stands as fundamentals remain solid. logical-dreamer shares a similar view but emphasizes the valuation reset.

Global Payments Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held GPN at the end of the second quarter which was 65 in the previous quarter. While we acknowledge the potential of GPN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.