Is Global Payments Stock Underperforming the Dow?

With a market cap of $29 billion, Global Payments Inc. (GPN) is a leading provider of payment technology and software solutions, serving customers across the Americas, Europe, and the Asia-Pacific region. It operates through two primary segments: Merchant Solutions, which offers a comprehensive suite of payment processing and enterprise software services, and Issuer Solutions, which helps financial institutions manage card portfolios and commercial payment systems.

Companies valued at $10 billion or more are generally classified as “large-cap” stocks and Global Payments fits this criterion perfectly. With a strong focus on innovation, Global Payments delivers secure, seamless payment experiences across card, digital, and check-based platforms. Based in Atlanta, Georgia, the company has expanded internationally through strategic acquisitions and partnerships.

However, the electronics payment processing company has slipped 19.2% from its 52-week high of $141.77, recorded in February. Shares of Global Payments have risen 2.3% over the past three months, underperforming the broader Dow Jones Industrials Average's ($DOWI) 4.5% gain over the same time frame.

In the long term, GPN is down 9.7% on a YTD basis, lagging behind DOWI's 15.4% rise. Moreover, shares of Global Payments have declined 10.6% over the past 52 weeks, compared to Dow Jones' 16.6% returns over the same time frame.

Yet, GPN stock has been trading above its 50-day and 200-day moving averages since November.

Despite reporting weaker-than-expected Q3 adjusted EPS of $3.08 and adjusted revenue of $2.4 billion, shares of Global Payments rose 4.3% on Oct. 30 because the company reaffirmed its 2024 guidance, projecting adjusted net revenue of $9.2 billion - $9.3 billion and adjusted EPS of $11.54 - $11.70, reassuring investors about its long-term growth. The $600 million accelerated share repurchase program and a $1.1 billion agreement to sell AdvancedMD signaled strong capital allocation and a focus on core business operations. Furthermore, the Merchant Solutions segment delivered 6.7% revenue growth and an 8.7% increase in adjusted operating income, showcasing resilience despite a challenging quarter.

Nevertheless, in comparison, rival Corpay, Inc. (CPAY) is outperforming GPN. Shares of Corpay have gained 28.9% over the past 52 weeks and are up 26.6% on a YTD basis.

Despite GPN’s weak performance, analysts remain moderately optimistic about the stock’s prospects. The stock has a consensus rating of "Moderate Buy" from the 34 analysts in coverage, and the mean price target of $132.69 is a premium of 15.8% to current levels.