Global Payments Inc.GPNNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $496.10 per share(market-calibrated)

+536.9%

Upside to Fair Value

Current

$77.89

Pure Model

$538.61

Fair Value

$496.10

Bull Case

$725.19

Bear Case

$413.98

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

0.50%

Calibrated Growth

1.64%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $538.61.

What's Driving This Ratingfor GPN

↓

CapEx normalizing toward maintenance

Historical CapEx is 7.94% of revenue (heavy investment phase). Model fades this to 3.50% by Year 10, freeing up ~$901M in annual FCF. This is the biggest driver of long-term cash flow improvement.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 63.22% in Year 1 to 8.98% by Year 5 (per analyst consensus). This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 175bps below the model's 2.25%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 82.41% indicates efficient cash generation. FCF reaches $6.8B by Year 10 (33.34% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.73

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)7.79%

Cost of Debt

Pre-tax Cost of Debt2.50%

Tax Rate18.23%

After-tax Cost of Debt2.05%

Equity Weight (E/V)46.13%

Debt Weight (D/V)53.87%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (46.13% × 7.79%) + (53.87% × 2.05%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$12.6B	$14.2B	$16.0B	$18.3B	$20.3B
EBIT	$2.3B	$2.6B	$3.0B	$3.4B	$3.8B
Tax	$427M	$481M	$542M	$620M	$689M
NOPAT	$1.9B	$2.2B	$2.4B	$2.8B	$3.1B
+ Depreciation	$2.7B	$3.1B	$3.5B	$4.0B	$4.4B
- Capex	$999M	$986M	$952M	$909M	$710M
- Δ NWC	$487M	$88M	$131M	$108M	$45M
Free Cash Flow	$3.2B	$4.2B	$4.8B	$5.7B	$6.8B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$3.0B	$3.6B	$3.7B	$4.0B	$4.0B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$6.8B

Terminal Growth Rate2.25%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$212.8B

PV of Terminal Value$124.6B

Exit Multiple Method

Year 10 EBITDA$8.2B

Exit Multiple (EV/EBITDA)18.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$147.7B

PV of Terminal Value$86.5B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$37.1B

PV of Terminal Value$124.6B

Enterprise Value$161.7B

(-) Net Debt$13.5B

Equity Value$148.2B

Shares Outstanding240M

Price per Share$618.04

Exit Multiple Method

PV of Projected FCFs$37.1B

PV of Terminal Value$86.5B

Enterprise Value$123.6B

(-) Net Debt$13.5B

Equity Value$110.1B

Shares Outstanding240M

Price per Share$459.18

Pure Model Fair Value

$538.61

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
3.50%	$784.93	$823.92	$788.22	$754.20	$721.77
4.50%	$588.50	$641.59	$718.29	$754.20	$721.77
5.50%	$475.54	$502.87	$538.61	$587.34	$657.73
6.50%	$399.44	$415.48	$435.30	$460.41	$493.23
7.50%	$343.28	$353.51	$365.70	$380.44	$398.66

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$413.98

431.5% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.92

Base Case

$538.61

591.5% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 0.73

Bull Case

$725.19

831.0% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 0.62

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Industrials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth63.22%

Year 3 Revenue Growth6.59%

Year 5 Revenue Growth8.98%

Year 7 Revenue Growth6.29%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin18.63%

Terminal EBIT Margin19.10%

Tax Rate18.23%

Historical Capex / Rev7.94%

Terminal Capex / Rev3.50%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (Industrials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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