Own Global Payments Stock? Here's Why You May Want to Stay Put

Global Payments Inc. GPN is well-poised to grow on the back of highly recurring, transaction-based revenues, strong free cash flow generation and secular digital payment tailwinds. However, increasing costs and intensifying competition remain concerns.Global Payments — with a market cap of $19.1 billion — is a global payment solutions provider based in Atlanta, GA. Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.Where Do GPN’s Estimates Stand?The Zacks Consensus Estimate for Global Payments’ 2026 earnings is pegged at $13.86 per share, indicating a 13.4% year-over-year increase. The estimate has witnessed 12 upward revisions and one downward movement over the past 60 days. Furthermore, the consensus mark for revenues is pegged at $12.44 billion for 2026, indicating a 33.6% year-over-year jump.It beat earnings estimates thrice in the past four quarters and met once, with the average surprise being 2.1%.Global Payments Inc. Price, Consensus and EPS Surprise Global Payments Inc. price-consensus-eps-surprise-chart | Global Payments Inc. QuoteGPN’s Growth DriversGlobal Payments has entered a new phase with the completion of its Worldpay acquisition, creating one of the world's largest merchant acquirers. The combined company now serves more than six million merchants across 175 countries, processing about 94 billion transactions and $3.7 trillion in annual payment volume. The larger scale strengthens its position in enterprise payments while expanding its e-commerce and omnichannel offerings.The business also benefits from a highly recurring revenue model. Once merchants integrate Global Payments' software and payment solutions into their operations, switching providers becomes costly and disruptive. That helps the company retain customers, generate steady transaction revenues and produce consistent cash flows.Long-term industry trends remain another major advantage. Consumers and businesses continue shifting from cash to digital payments, supported by rising ecommerce activity, contactless transactions, embedded payments, software-integrated solutions, digital wallets and cross-border commerce. These trends should continue driving payment volumes over time.Global Payments ended the first quarter of 2026 with about $5.9 billion in cash and generated $544 million in adjusted free cash flow, equal to nearly 70% of adjusted net income. Management expects free cash flow conversion above 90% for the full year and plans to return more than $2 billion to shareholders in 2026 while maintaining an investment-grade balance sheet.Price Target for GPNBased on short-term price targets offered by 26 analysts, the Wall Street average price target for Global Payments is at $92.62 per share, suggesting a 32.7% upside from current levels.Key ConcernsThere are a few factors that can hinder the stock’s growth.Despite implementing various cost-control measures, the company's operating expenses are on the rise. Adjusted operating margin fell to 39.9% in the first quarter from 42.4% a year ago. Additionally, intensifying competition in the payments industry presents a challenge. Emerging fintech companies with strong growth potential are rapidly gaining market share, increasing the need for innovation and differentiation.Nevertheless, GPN’s strategic approach — focusing on partnerships, technology investments and maintaining financial flexibility — positions it for long-term success despite these headwinds.Better-Ranked PlayersSome better-ranked stocks from the broader payments space are Klarna Group plc KLAR, Paymentus Holdings, Inc. PAY and Remitly Global, Inc. RELY, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Klarna’s current-year earnings indicates a 105.1% year-over-year improvement. KLAR has witnessed four upward estimate revisions over the past 60 days against no movement in the opposite direction. The consensus estimate for current-year revenues is pegged at $4.44 billion, indicating 26.5% year-over-year growth.The Zacks Consensus Estimate for Paymentus’ current-year earnings indicates a 19.7% year-over-year jump. PAY beat earnings estimates in each of the trailing four quarters, with the average surprise being 12%. The consensus estimate for current-year revenues implies 19.9% year-over-year growth.The consensus estimate for Remitly Global’s current-year earnings indicates a 331.3% year-over-year surge to $1.38 per share. It has witnessed one upward estimate revision and no downward movement over the past 60 days. The consensus estimate for RELY’s current-year revenues is pegged at $1.97 billion, implying 20.4% year-over-year growth.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks