Rating Change #4
Global Payments Inc
(GPN - Get Report)
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 111.32% to $68.63 million when compared to the same quarter last year. In addition, GLOBAL PAYMENTS INC has also vastly surpassed the industry average cash flow growth rate of 0.61%.
- The gross profit margin for GLOBAL PAYMENTS INC is rather high; currently it is at 69.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.90% trails the industry average.
Global Payments Inc. The company has a P/E ratio of 18.3, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Global Payments has a market cap of $3.41 billion and is part of the
industry. Shares are down 7.6% year to date as of the close of trading on Friday.
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Global Payments Ratings Report
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