Global Payments Announces Mixed Results, Strategic Partnership With Google

Global Payments reported a mixed set of fourth quarter and full-year 2020 financial results on Monday, together with the announcement of a strategic partnership with Google to deliver innovative cloud-based products and capabilities.

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For the fourth quarter of 2020, Global Payments (GPN) posted an 11% year-on-year increase in adjusted EPS, with the figure landing at $1.80 and beating analysts’ estimates of $1.77. Revenues, however, declined almost 3% to $1.75 billion, falling short of forecasts of $1.77 billion.

Full-year revenues declined 5.2% from 2019 to $6.75 billion, while EPS increased 2.9% year-on-year to $6.40.

“Our performance in the fourth quarter and for the full year 2020 exceeded our expectations post COVID-19 and highlights our outstanding execution and the resiliency of our business model,” said Paul Todd, Senior Executive Vice President and Chief Financial Officer.

The payments technology company also announced a multi-year partnership with Google today that will see Global Payments migrate its merchant acquiring technology to the Google Cloud, which will streamline its operating environment.

The partnership gives both companies the ability to leverage each other’s significant expertise and will create strategic co-selling opportunities worldwide for both companies.

Global’s CEO Jeff Sloan said, “Our new collaboration with Google advances our merchant business competitively by driving incremental revenue and lowering operating costs through a multi-year worldwide go-to-market distribution and product development relationship combined with utilization of cutting edge, transformative cloud native technologies. Together we will bring new best-in-class digital products to market worldwide more quickly, and we will further accelerate our culture of market-leading innovation.” (See Global Payments stock analysis on TipRanks)

Following the release of its results, Mizuho Securities analyst Dan Dolev reiterated his Hold rating on Global, setting a Street-low price target of $165. This implies downside potential of around 19% from current levels.

Looking forward to Q1 2021, Dolev expects Global to post EPS of $0.74. Meanwhile, Global expects 2021 to be a successful year and are excited to return to growth across all segments. Revenues for 2021 are expected to grow between 11% and 13% to $7.6 billion, with EPS for the year in the range of $7.75 to $8.05, which represents growth of between 21% and 26%.

Other analysts on the Street are more optimistic than Dolev, with a Strong Buy consensus rating based on 14 Buys and 2 Holds. The average analyst price target of $213 suggests upside potential of around 6% over the next 12 months.

Global Payments receives a 9 out of 10 on TipRanks’ Smart Score, which suggests that GPN is expected to outperform analysts’ expectations moving forward.