Global Payments Inc (GPN)

Conclusion

Global Payments Inc provides payment technology, software and terminal services for card, check and digital payments across the Americas, Europe and Asia-Pacific. At a price of 97.77 USD on 2026-11-09, the market capitalisation is 25.9 billion USD and the enterprise value is 44.0 billion USD.

The verdict is undervalued. Today's EV/EBITDA of 14.2x sits below its ten-year median of 18.5x, the price-to-sales ratio of 2.3x below its median of 4.1x, and the price-to-book ratio of 1.1x below its median of 1.6x. The fair value band runs from 118.33 to 177.49 USD with a midpoint of 147.91 USD, a margin of safety of 51.3% at the price of 97.77 USD. The discounted cash flow value is not available because free cash flow is negative, and no reverse DCF figure is available, so the growth the price implies cannot be set against the growth delivered.

What holds the case up: earnings per share grew at a five-year compound rate of 24.6%, free cash flow conversion over five years was 206.7%, and the share count fell at 4.4% a year over five years. What would break it: interest coverage of 1.02x, net debt to EBITDA of 5.86x, and ROIC of 2.0% against a WACC of 6.6%, with trailing free cash flow negative.

Financial health

Financial health is grey, because debt is part of the trade of a financial business and the standard distress models do not apply. The weakest figures are interest coverage of 1.02x and net debt to EBITDA of 5.86x, both assessed as risk, and a current ratio of 0.82 and quick ratio of 0.74, which are on watch. Debt to equity stands at 1.02. The Altman Z-score is 0.69, in the distress zone; the Altman model was designed for manufacturers, and this company is not one, so the reading is indicative only. Insolvency risk: not assessed, because the Ohlson model does not apply to a financial business. Thin interest coverage leaves little buffer if earnings fall further.

Earnings quality

Earnings quality is green, supported by five-year free cash flow conversion of 206.7%, a negative accrual ratio of -2.5%, and a five-year share count decline of 4.4% a year, which reflects buybacks. The Piotroski score is 6 out of 9. The company beat estimates in six of the last eight quarters, with an average surprise of 1.3%. Trailing free cash flow conversion is not available. Trailing free cash flow after stock-based compensation is -320.8 million USD, and stock-based compensation is 1.3% of revenue. The Beneish M-score is not available. Estimates for the current year fell 0.5% over 90 days, with four downward revisions and one upward in the last 30 days. Estimates for next year rose 1.3% over 90 days, with 7 upward and 1 downward revision, implying growth of 18.4%.

Profitability

Profitability is red. The operating margin of 7.1% compares with a ten-year median of 21.0%, and the net margin of -11.4% compares with a median of 10.8%; the gross margin of 61.5% is above its median of 57.8%. ROIC is 2.0% against a WACC of 6.6%, a given ROIC minus WACC value of -4.58%, and the five-year median ROIC is 3.9%. The DuPont split for 2025 shows a net margin of 18.2%, an asset turnover of 0.14 and an equity multiplier of 2.33. Leverage therefore amplifies returns on equity, and trailing return on equity is negative at -5.7%. The company is currently not earning its cost of capital.

Growth

Growth is green. Revenue compound growth is -5.0% over three years, 0.75% over five years and 10.8% over ten years, and revenue grew in 8 of 10 comparable years. Earnings per share compound at 143.3% over three years, 24.6% over five years and 11.0% over ten years. Free cash flow per share compounds at 12.8% over three years, 6.3% over five years and 13.0% over ten years. The revenue record is uneven: the recent three-year decline sits against a longer-term growth record, and the strong per-share growth is supported partly by the falling share count.

Valuation

Valuation is green, with the only assessed signal being the fair value band. Against ten-year medians, EV/EBITDA is at a discount of 23.2%, price-to-sales at a discount of 45.4% and price-to-book at a discount of 28.9%. The current P/E is not available, because earnings are negative, against a median of 43.1x; the free cash flow yield is -0.65%, against a median price-to-free-cash-flow of 21.3x. The fair value from historical multiples is 147.91 USD. The discounted cash flow value is not available, since free cash flow is negative, although the discount rate in its inputs is 8.98%. The reverse DCF is not available. The fair value is an estimate built on fixed assumptions, a 5% equity risk premium and capped growth, not a price target. The dividend yield is 1.0%, but free cash flow is negative, so the dividend is not covered by trailing free cash flow.

Risks

The weakest numbers would each damage the company in a specific way. Interest coverage of 1.02x and net debt to EBITDA of 5.86x leave little room if borrowing costs rise or earnings fall. The Altman Z-score of 0.69 points to financial stress, though the model's fit here is limited. ROIC of 2.0% below a WACC of 6.6% means growth currently destroys value. Negative trailing net margin and free cash flow mean the current valuation depends on a recovery. Current-year estimates are being cut.

Some values are not available: the discounted cash flow value, the reverse DCF, trailing free cash flow conversion, the Beneish M-score, and any insolvency probability. This analysis also lacks a debt maturity schedule and revenue by segment, so refinancing risk and the mix of the business cannot be assessed.