Global Payments Earnings: Recent Trends Hold; Shares Materially Undervalued

We think Global Payments largely maintained its recent trajectory in the fourth quarter. The company continues to achieve solid growth and modest margin expansion. While it is still early, we think Global Payments is making some progress on the long-term goals that management laid out at its recent investor day, while the market seems to be overly concerned about potential disruption to the business. In our view, the relatively steady performance supports our thesis that the narrow-moat firm can maintain its competitive position in the long run. We maintain our $171 fair value estimate and see the shares as materially undervalued.