Key takeaway: Global Payments, a key intermediary between retailers and banks, trades well below its competitors’ and its own historical multiples. The company hopes to turn the situation around by acquiring an overwhelming share of the merchant acquisition market through the acquisition of Worldpay and the introduction of its POS system. Global Payments could see a turnaround through accelerated cash flow and higher returns to shareholders, and if that doesn’t work out, a leveraged buyout is a possibility. Global Payments’ stock has been in the doldrums for so long that investors may be tempted to overlook its attractive valuation and burgeoning comeback story. A major reorganization in early 2025 further sharpened Global Payments’ strategic focus. Reduced costs and reduced assets. With help from activist investor Elliott Management, the company is integrating its acquisition of Worldpay. Cash flows are expected to accelerate, providing funding for share repurchases and strengthening the balance sheet. Such a move could boost the stock price or attract the attention of private equity firms eyeing transactions in the payments space. After falling more than 65% over the past five years, the stock has hovered near multi-year lows for the past nine months. This poor performance has lowered the forward earnings multiple to just 4.9x, well below the five-year average of about 15x and the peak of 25x. It also trades at a deep discount to major competitors such as Fiserv, Fidelity National Information Services, PayPal, Shift4 Payments, and Toast. A long-term payments tradition Atlanta-based Global Payments started as a division of National Data Corp. Initially, the company focused on processing transactions for banks, but over time it expanded to offer a range of payment products. Global Payments, which was spun off from NDC in 2001, has only recently transitioned to being a pure merchant acquirer after selling its issuer solutions business. As a merchant acquirer, we act as an intermediary between merchants and banks, helping businesses accept credit card payments, approve transactions, settle funds into merchants’ bank accounts, and manage risks such as fraud and chargebacks. After acquiring Worldpay in January, the company became the country’s largest player in the business. The partnership with Worldpay strengthens Global Payments’ presence in Europe and enhances some of its services, including e-commerce capabilities. The newly streamlined company serves more than 6 million locations in more than 175 countries, processing approximately 94 billion transactions and approximately $4 trillion in payment value. Despite its size, Global Payments was caught off guard as more and more retail moved online, ceding market share to technology-focused entrants like Adyen, Stripe, and Square. As Global Payments struggled to maintain its strategic focus, these companies innovated rapidly, contributing to below-market net revenue growth of 2% in 2025 compared to 6% a year earlier. A Transformation Story But last year, Global Payments consolidated its POS products into an all-in-one platform called Genius to simplify its business with the goal of building stronger brand recognition and loyalty. Citigroup analysts expect Genius will make Global Payments’ brand more recognizable, making it easier to market to new customers and sell additional services to existing ones. The result could be an “exposure snowball” where the more devices used, the more merchants associate the service with business success, analysts said. Global Payments is also leaning into artificial intelligence. Speaking at the Wolf FinTech Forum in New York City on March 10, CEO Cameron Brady said Global Payments has a “huge opportunity to deploy AI to drive business efficiency.” He cited areas such as software development, developer productivity, product lead time and speed, and payment account reconciliation. Some analysts worry that global payments will continue to be tied to in-store spending and could miss a new shift to agent commerce, where autonomous AI agents compare and buy goods and services on behalf of consumers. However, the company says it is actively working on the transition. “We’re at the forefront of everything that’s happening from an agent commerce perspective,” Brady said this month. “We have participated in all the major protocols that have been released and announced by Google, OpenAI, and others.” Global Payments’ stock price has yet to reflect this new reality, even after it soared 17% on February 18 following the company’s better-than-expected fourth-quarter earnings report. The stock gave up its gains in the following days as investors remained concerned about revenue growth and the risks associated with integrating the Worldpay business. GPN 5Y Mountain Global Payments stock price performance over the past 5 years. The company said it expects adjusted net sales growth of approximately 5% and adjusted EPS growth of 13% to 15% in fiscal 2026, both of which are ahead of analyst expectations. Executives called the outlook “prudent” in an earnings conference call and suggested there could be further upside to the company’s outlook. Adjusted operating margin is expected to expand 150 basis points, supported by higher operating leverage and integration gains from the Worldpay transaction, which closed ahead of schedule, and is on track to deliver $600 million in cost savings over the next three years. Post-acquisition, Global Payments’ scale provides benefits such as lower transaction costs and improved fraud detection capabilities. Its global reach, omnichannel capabilities, and secure end-to-end solutions result in high switching costs and a competitive advantage for multinational clients. Global Payments has added 200 salespeople and plans to expand its team to 500 by mid-year, aiming to reach a broader range of merchants through a multichannel distribution model that includes direct sales, partnerships, and integrated software. This sales expansion and improved sales efficiency is expected to result in revenue growth of more than 5% in the second half of 2026. Not all investors avoided global payments. Activist hedge fund Elliott Management acquired the stock in the summer of 2025, buying into the drop following the announcement of the revolutionary WorldPay deal. Global Payments has reached an agreement with Elliott to appoint three independent directors and establish an integration committee by September 2025. Mr. Elliott’s involvement brings operational expertise to the board and will play a key role in guiding the integration of WorldPay. After exiting Global Payments in 2023 for $108.61 per share, David Einhorn’s Greenlight Capital bought back the shares in the fourth quarter of 2025 for $77.85 per share. In a letter to investors, they noted that Global Payments’ consistent organic growth and plans to return nearly $7 billion, or about a third of its market capitalization, to shareholders over the next two years should increase its market visibility and boost its stock price. Re-rate will be higher. Stock Buybacks and Debt Reduction In February, Global Payments reiterated its intention to repurchase $7.5 billion in stock by the end of 2027. To date, the company’s board of directors has approved $2.5 billion in buybacks, of which $550 million is earmarked for immediate stock buybacks. Mizuho estimates the plan could boost annual earnings per share growth by 25% over the medium term. Global Payments’ strong free cash flow generation contributes to achieving this goal. The company expects to generate $3 billion in adjusted free cash flow in 2025, rising to more than $4 billion in 2027 and more than $5 billion by 2028. At this pace, the company expects to generate enough cash to cover its entire market capitalization within five to six years. The company is also looking to use cash to lower its net leverage ratio to an expected 3x by the end of 2027. Strengthening its financial base will also help support multiple business expansions. Target for an LBO? Companies generating such large cash flows often attract the attention of leveraged buyout players. A recent Bank of America report notes that “deal activity has picked up recently, with private equity (PE) firms showing renewed interest in fintech and payments.” After its stock price plummeted in late February, rival PayPal was revealed to be the subject of rumored acquisition interest from Stripe. PayPal is reportedly in talks with banks to prevent a hostile takeover. Global Payments executives appear to be open to the idea. “When you get to a certain point over a period of time where you’re integrating the business, delivering results, returning capital, and the public markets continue to not value the business, I think it’s your responsibility to consider all options and evaluate all alternatives,” Brady said on the company’s latest earnings call. Global Payments is valued at about $35 billion, which some investors may consider too large for a leveraged acquisition. But last year’s $55 billion acquisition of Electronic Arts shows it still has appetite for big deals. The acquisition is likely to require support from private equity firm GTCR, which acquired a 15% stake in Global Payments as part of the Worldpay deal. Wall Street analysts are somewhat cautious about Global Payments’ stock, with about 42% of the 33 analysts covering it rating it a “buy.” According to LSEG, about 52% of the stock is on hold, with two analysts rating it underperform. Analysts remain concerned about Global Payments’ ability to maintain solid growth rates, avoid market share loss and integrate the Worldpay acquisition. For example, Wolf analysts said they are “looking for more concrete evidence of post-merger milestones.” However, analysts’ average price target of $101.32 is almost 44% above the current price, suggesting that Global Payments’ current valuation and expected large cash flow generation give the stock a significant runway for upside. Global Payments’ turnaround story is just beginning, with only a few smart hedge funds touting its name, but now might be the time to make a move before a flurry of analyst upgrades and even acquisitions send the stock higher. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. 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