Overdone Concerns Around Global Payments' Organic Growth Weighing On The Stock

"We like GPN quite a bit, particularly after giving up its 3+ percent move post-FQ1 results, as investors have been overly (in our view) concerned around organic growth," said Baird.

Global Payments has a Core US Growth and North American Organic growth rates remain in the high single digits. There has been some concern about the limited disclosure surrounding organic growth figures, but the analysts feel that concerns are overdone for a few reasons, including:

1. Heartland and Global Payments have been integrated. "Given the ongoing/natural sales rep turnover, it becomes difficult to decide which new reps go into which revenue bucket."
2. Year-ago pro forma numbers are not very relevant. "Previously, GPN did provide HPY historical data, but the data was not on a non-GAAP apples/apples basis to what GPN reports, meaning we can't cleanly use the data anyway."

Related Link: Global Payments Posts Q1 Beat, Raises Outlook

Baird analysts were pretty forward about what they like about Global Payments Inc., saying, "Financial tech stocks tend to work when there is a clear revenue and margin story. Management has executed incredible well in augmenting core growth with accretion from use of cash."

Key Reasons For A Buy

• Strong execution.
• Good buyback strategy.
• Expects beat/raise pattern to continue.

Baird has a $88 price target on Global Payments Inc. with an Outperform rating.

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