Summary

  • Global Payments stock fell ~12% after take-private talks collapsed, leaving shares at approximately 6x forward earnings.
  • Despite strong margins, cash flow and buybacks, Global Payments needs a separate catalyst to trigger a valuation re-rating.
  • The expected slowdown in the payments industry growth is not the only reason why I believe Global Payments is facing headwinds.
  • As of Q3, Global Payments' net leverage stood at 3.4x. The company's goal is to bring this down to 3x by the end of 2027. This is an attainable goal.
  • If EBITDA grows by an average of around 12% in the next 5 quarters while revenue grows modestly, the leverage ratio should hit this target even without any aggressive debt repayment.

Global Payments Inc. (GPN) stock got hammered on November 12 after reports emerged that Clayton Dubilier & Rice and GTCR are no longer pursuing a deal to take the company private. Per Barron's, the

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