Global Payments (GPN): What Happened?

1. Executive Summary

Global Payments, like its peers Worldline and PayPal, has been de-rated as the market assumed payments had become a commodity. The thesis for GPN is now a value play: Can they successfully pivot to software-led payments (POS, Vertical Software) faster than their legacy merchant acquiring business decays?

Key Thesis Points

1. The "Junk" Disposition: GPN is actively pruning low-margin businesses and exiting geographies to focus on core profitable markets. This shrinks revenue but improves quality.
2. Valuation Floor: Trading at <10x forward earnings, the market is pricing in zero growth. Any stabilization in organic revenue growth would drive a re-rating.
3. Buybacks: Management is using free cash flow to aggressively buy back undervalued shares.

2. Business Overview

• Merchant Solutions: Payment terminals and e-commerce gateways.
• Issuer Solutions: Processing services for credit card issuers (banks).

3. Risks

• Adyen/Stripe: These modern competitors iterate faster. GPN is burdened by legacy tech stacks that are hard to modernize.
• Macro Sensitivity: Payment volumes are directly tied to consumer spending. A recession hits GPN immediately.