Global Payments Sinks 28.3% YTD: Dip Worth Buying or Just Dead Weight?

Global Payments Inc. GPN appears well-positioned to regain momentum as it enters a defining phase, guided by transformative portfolio moves, focused partnerships and an improving financial foundation. Even so, competitive intensity and wary investor sentiment continue to weigh on the stock. The Atlanta-based payments provider holds a market cap of $18.3 billion and serves merchants worldwide through a broad suite of technology-driven payment solutions.Despite its scale and reach, GPN shares have slid 28.3% year to date, lagging both the industry’s decline and the S&P 500’s strong performance. Peers such as Fidelity National Information Services, Inc. FIS and Fiserv, Inc. FISV have also witnessed declines, but GPN’s deep pullback has sharpened questions about whether the current weakness presents a window to build a position.The key consideration for investors is whether this downturn reflects temporary uncertainty or a mispricing of long-term potential. To assess that, it’s important to examine GPN’s strategic plan, earnings trajectory and financial strength. Image Source: Zacks Investment ResearchThe company’s most important growth catalyst centers on the pending acquisition of Worldpay from GTCR and Fidelity National, along with the divestiture of GPN’s Issuer Solutions unit to Fidelity National. Both transactions are expected to close in early 2026. This major portfolio realignment will shift GPN into a pureplay merchant solutions company, allowing it to concentrate capital on its core strengths, enhance scale and elevate operating efficiency. The approval from the Competition & Markets Authority in the U.K. strengthened confidence in the path forward.Once completed, the combined platform is expected to significantly widen GPN’s global network. The integration will extend the company’s presence across diverse verticals and merchant tiers, reaching more than 175 countries and supporting over 6 million clients. Together, the businesses are projected to process 94 billion transactions and $3.7 trillion in volume, helping deepen customer stickiness and reinforce the competitive moat across key markets.What Does GPN’s Estimates Signal?GPN’s earnings outlook adds further support. The Zacks Consensus Estimate for 2025 suggests earnings of $12.22 per share, indicating a 5.8% year-over-year increase, followed by an additional 12.3% rise in 2026. Revenue growth projections, though more modest, still trend upward with expected gains of 1.7% in 2025 and 4.6% in 2026. GPN beat earnings estimates in three of the last four quarters and missed once, with an average surprise of 1.9%.Global Payments Inc. Price, Consensus and EPS Surprise Global Payments Inc. price-consensus-eps-surprise-chart | Global Payments Inc. QuoteGPN’s Financial HealthFinancial flexibility remains a major strength. At the end of the third quarter, Global Payments held $2.6 billion in cash and cash equivalents, comfortably exceeding its current portion of long-term debt of $1.9 billion. Operating cash flow totaled $2.1 billion over the first nine months of 2025, and the company continued to achieve adjusted free cash flow conversion above 90%. This liquidity gives GPN room to invest in technology, pursue growth initiatives and fund shareholder returns. The company repurchased $1.6 billion of stock in 2024 and another $1.2 billion in the first nine months of 2025, demonstrating its commitment to capital deployment.Average Price TargetGPN trades below the average analyst price target of $103.17, implying potential upside of more than 33%. The spread between the high target of $194 and the low target of $70 reflects different risk views, but the consensus direction remains positive.Key ConcernsHowever, several hurdles could restrain the stock.GPN trades at just 6.15X forward earnings, far below its five-year median and the broader industry average. This steep discount underscores investor caution around the execution of the Worldpay integration and the challenge of upgrading its technology stack while supporting growth and continuing shareholder distributions. Meanwhile, Fidelity National and Fiserv are currently trading at 10.58X and 7.99X, respectively, above GPN’s level. Image Source: Zacks Investment ResearchOperating expenses remain elevated despite efficiency efforts, with adjusted costs rising 5.4% in 2023 and 4.8% in 2024, and we expect it to hover near $5.2 billion in 2025. Adjusted EBITDA margins have also softened, slipping from 49.9% in 2023 to 48.6% in 2024 and remaining at that level through 2025.Competition is another headwind. Fast-growing fintech players are reshaping the payments landscape, pressuring pricing power and accelerating the need for innovation and differentiation.ConclusionGlobal Payments’ sharp valuation discount, solid cash generation and upcoming Worldpay integration create a compelling setup for long-term investors willing to tolerate near-term execution risk. While competition and elevated expenses remain real hurdles, the company’s focused transformation into a pureplay merchant solutions provider, paired with steady earnings growth expectations, supports a constructive outlook.With shares trading well below historical and peer multiples, much of the skepticism already appears priced in. Given the balanced mix of opportunity and risk, GPN merits a Zacks Rank #3 (Hold) now, with potential upside as integration milestones are met and financial momentum strengthens. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report Fiserv, Inc. (FISV): Free Stock Analysis Report Global Payments Inc. (GPN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks