1. Security Global Payments
Ticket Symbol GPN
Market NYSE
Sector Financial
Sub-Industry Payments
Analysts Sam Jones
Lucy Herriot
Kate O’Neill
Monica Wadekar
Stanley Chong
Sector-Heads Azuolas Ciukas
Camellia Huang
Recommendation Buy
Target Price USD 67.00
Upside 8.7%
Stop Loss USD 52.00
Allocation 500GBP
Key Figures
Price $61.60 (27/2/16)
Market cap 7.97 bn USD
P/E 27.71
Div Yield 0.06%
ROE 34.51%
ROA 12.51
Net margin 11.10%
D/E 3.23
EdinburghUniversityTradingandInvestmentClub
Company overview
Global Payments Inc. is a provider of electronic
transaction processing services for merchants,
Independent Sales Organizations (ISOs), financial
institutions, government agencies and multi-
national corporations located throughout the
United States, Canada, Europe, and the Asia-Pacific
region. Global Payments, a Fortune 1000 company,
offers processing solutions for credit and debit
cards, business-to-business purchasing cards, gift
cards, electronic check conversion and check
guarantee, verification and recovery including
electronic check services, as well as terminal
management.
Investment case
1. The company is growing through
acquisitions. With more deals announced
for this year the company might continue to
grow non-organically and dominate the
market by doing accretive deals, making
them more profitable.
2. Global Payments has a good size market
share in its main regions.
3. The industry as a whole is regarded as
relatively stable and a profitable area.
Catalysts
1. Future accretive acquisitions can grow the
company, making it more profitable and
increasing the stock price.
2. Increased consumer spending has
increased revenues which can in turn
increase the stock price.
Key risks
1. Currency risk
- This is the result of cross border
transactions. However, the dollar is
expected to remain stable relative to
the pound, so this should not heavily
affect investment.
2. Regulations
- The company is subject to a variety of
regulations both within the US and
based on the companies they work
with, such as MasterCard and Visa,
which may impact upon growth.
3. Slowdown in consumer spending
- As revenues depend heavily on
consumer spending, a recession or
macroeconomic shock may cause
revenues to fall. Operating in North
America, Europe and Asia, if there is a
fall in demand in one market, it may be
offset by growth in another.
Global Payments (GPN.NYSE)
Buy

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2
Valuation: Executive Summary
For the valuation we used the comparables method. All of the multiples showed that Global Payments
is an overvalued stock. Due to the choice of 5 competitors the valuation is likely to be accurate to a
certain extent from the bias perspective, however it would be more accurate if a greater number of
multiples and competitors were used. Moreover, as most of the peers in the payment industry are not
only doing payment services, there is a huge bias in terms of similarity of the comps. Therefore, this
might be the case why the model shows that Global Payments are overvalued.
The valuation is not favourable, however as Global Payments is a large player in a growing market we
would expect the share price to increase over the next 12 months due to the growth catalysts or bias
in the valuation.
Multiples
Gross Margin Net Margin ROI EPS Growth Div yield P/E P/B P/S P/CF
Global Payments 63.14% 11.10% 11.12% 59.71% 0.14% 23.60 10.07 2.76 12.03
Euronet Worldwide 38.68% 5.39% 7.72% 183.80% 0.00% 38.97 4.58 2.00 14.53
CIT Group 38.36% 0.00% 70.60% 0.55% 4.75 0.52 1.94 4.27
Gross Margin 20.00% Ally Financial 13.14% 0.00% -31.14% 0.00% 0.61 1.82 1.69
Net Margin 30.00% Starwood Property Trust 56.12% 61.42% 0.43% 11.16% 11.03% 9.29 1.04 5.13 17.86
ROI 0.00% SLM Corp 84.52% 33.00% 10.35% -11.33% 1.78% 10.08 1.25 3.35
EPS Growth 30.00%
Div yield 20.00%
Total 100.00% Market Average 60.62% 27.07% 4.94% 47.13% 2.25% 17.34 3.01 2.83 10.08
Parameters
P/E
Weightings
P/E (currently) 23.60
Current Share Price 59.19
P/E (estimated) 16.87
Estimated Share Price 42.32
% difference -28.50%
P/B (currently) 10.07
Current Share Price 59.19
P/B (estimated) 2.93
Estimated Share Price 17.22
% difference -70.90%
P/CF (currently) 12.03
Current Share Price 59.19
P/CF (estimated) 9.81
Estimated Share Price 48.25
% difference -18.49%
P/S (currently) 2.76
Current Share Price 59.19
P/S (estimated) 2.76
Estimated Share Price 59.13
% difference -0.10%

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Company Profile
Description
Global Payments Inc. is a provider of payment technology services and digital commerce solutions.
Incorporated in 2001 and based in Atlanta, Georgia, USA, the company displays one of the fastest
growing organic revenues in the global payments industry.
Service Base
Global Payments Inc., a Fortune 1000 company, operates in two segments:
 North America Merchant Services (71% of revenue)
 International Merchant Services (29% of Revenue).
The company’s services include transaction processing for businesses including authorization
processing, electronic drat capture, settlement and funding processing, chargeback resolution,
industry compliance, payment card industry security and one of its largest functions is payment
terminal deployment and management – in portable, static and mobile configuration.
The company currently services credit and debit card transaction processing for various international
card brands including American Express, UnionPay, Discover Card, Mastercard and Visa.
In 2015 Global Payments processed over 7.2 billion transactions, settling more than $425 billion.
Customer Base
Across 29 Countries in North America, Europe and Asia Pacific, Global Payments Inc. serves over 1.5
million customers:
1. Merchants 2. Value-added resellers
3. Enterprise software providers 4. Independent sales organisations (ISOs)
4. Government agencies 6. Multinational corporations
Both the International and North America segments of the organization target customers in various
vertical industries including financial institutions, gaming, healthcare, retail, professional services,
universities and non-profit. Global Payments is the primary card processing provider of HSBC Bank Plc
in the UK.
The majority of merchant services revenue is generated by services priced as a percentage of
transaction value or a specified fee per transaction, depending on card type. We also charge other
fees based on specific services that are unrelated to the number or value of transactions.
Business Model
Sales streams:
1. Direct sales to key customers 4. Via trade associations
2. Enterprise software agencies 5. Value-added reseller (VAR) arrangements
3. Independent sales organisations (ISOs) 6. Telesales groups
Global Payments deploys one of the most technically trained and experienced operations forces
available, providing a highly flexible service in the essential payment processing service sector.

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Revenue Streams
Prospects
In a modernizing world the importance of card and mobile payments is growing and such ventures as
global payments will only grow as players in the global flow of money - we are ‘fast approaching a
cashless society’ (Global Payments manifesto). Between 2014 and 2015 payment card purchase
volume at merchants in the US alone grew by $1.64 billion ($7.23 billion to $8.87 billion). We believe
therefore that the revenue of Global Payments has significant growth potential as the importance of
its already prominent electronic payment services grows on the world stage.
Global Payments recently announced that they will be offering ApplePay, which is transforming mobile
payments with an easy, secure and private way to pay among smartphone users who regularly use
their devices to shop online – 18.3 million in the UK alone. Capturing this potential mobile revenue
represents a tremendous opportunity.
The company in fact announced a few days ago that they will shortly launch an integration of their
systems with Apple Pay in China via China UnionPay payments. This captures more of the crucial China
market and offers opportunity for revenue growth in the Asia Pacific region.
Acquisitions
Two most recent acquisitions by Global Payments was Fidelity National Payment Services (NYSE: FIS)
gaming assets from Certegy Check Services Inc. and Heartland Payment Systems (NYSE: HPY). The
former includes 260 gaming client locations and the latter is one of America’s largest payment
companies.
Acquisition of Heartland Payment Systems by Global Payments creates the leading global provider of
integrated payment systems.
The deal will see the company’s merchant base and vertical reach expand greatly and accelerates
revenue growth, operating margin expansion and cash earnings per share growth. Global Payments’
recent acquisitions in both North America and International Merchant Services segments enhance
their technological capabilities and extend their reach in North America, Europe and Asia Pacific.
The company is expanding greatly having completed 3 other acquisitions in 2015 and 4 announced for
2016.
FY 2015 Net Revenue:
$2.78 billion – up 8.6% from $2.55
billion FY 2014
In terms of revenue, 71% comes
from North America, 22% from
Europe and 7% from Asia Pacific.
Revenue by Region

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Industry Analysis
Growth Factors
The payments industry has been growing steadily over the past several years, and grew by 9% in 2014,
compared with 4% in the preceding years. In particular, this was largely driven by transactions in the
Asia Pacific region, with 55% of revenue growth coming from this region. Within this, electronic
payments contribute $14bn to revenue growth (this is 55% of the industry’s revenue growth
worldwide). While Global Payments Inc currently has only 6.8% revenue from the APAC region, the
industry as a whole has been expanding internationally, and the company is also looking to expand
their presence in Asia.
In addition to the industry growing as a whole, spending by card is also increasing. In 2013, UK
consumers crossed £500bn worth of spending via cards, over 2x what it was in 2003, when card
spending was at £244bn. Between 2012 and 2013 alone, there was an increase of 6.7% in card
spending. It is also estimated that in the UK, debit and credit cards account for 3 in every 4 pounds
spent. However, while frequency of card use has increased (digital commerce grew by 22% in 2014),
the average transaction value for cards is decreasing. Revenue per transaction has been increasing
since 2008, for credit cards (by about $0.4 per transaction), though revenue for debit card transactions
has actually been falling (by about $0.14 per transaction).
Threats to Growth
Additionally, there has been a large amount of card fraud, particularly in the US. As a result, it has
been suggested that consumers switch over to EMV cards, rather than magnetic strip cards, as these
are less susceptible to fraud. This is likely to increase revenue for companies such as Global Payments
Inc. More specifically, the Eurozone already has an EMV adoption rate of 73.9%, and though Global
Payments Inc’s presence there only accounts for 22.2% of revenue, the company is looking to increase
their presence in Europe.
Future of the industry:
It is expected that due to its relative stability and predictable transaction volumes, the payment
industry will remain highly profitable. It is expected to grow between 6-8% annually through 2018,
even with the slowdown in growth in China. It is also predicted that transactional revenues will
increase by $340bn by 2018 due to higher transaction volumes. Furthermore, there is a trend towards
electronic payments. Between 2012 and 2013, the average transaction value in e-commerce rose by
£7.27. However, the convergence of online and offline payment methods may mean an increase in
competitors in the industry. For example, companies such as Apple introducing Apple Pay may mean
less of a consumer base for companies such as Global Payments Inc. However there are unlikely to be

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too many new entrants due to the large amount of regulations present in the industry. Even if there
were, Global Payments Inc is well established and so is likely to be able to maintain their market share.
In addition to growth in the industry, it is expected that interchange fees will fall; they are already at
2% but continued deflation of these is expected. This may mean increase in revenue in the industry.
On the other hand, there seems to be a trend towards mobile payments, which may pose a threat to
companies such as Global Payments Inc. However, if companies can stay up to date with technology,
this should not have too large an impact.

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Competitors Analysis
Key Competitors
Global Payment’s key competitors include Euronet Worldwide and CIT Group. All three companies
operate in many of the same areas; however, Global Payments has a better hold on the market as it
has a higher market cap and net income than the others.
Global Payments Market Share by Region
Market Cap ($M) Revenue ($M) Net Income ($M)
Global Payments 6,790 2,770 278.04
Euronet Worldwide 3,630 1,664 98.8
CIT Group 5,370 3,930 26.7
22%
71%
7%
Global Payments % Revenue by Region
Europe North America Asia

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Euronet Worldwide
Euronet Worldwide is an American provider of electronic payment services. Euronet gets 31% of its
revenue from RIA (money transfer, pre-paid debit and currency exchange services), 47% from epay
services and 22% from their Electronic Financial Transactions division. It has 30 principal offices in
Europe, 11 in Asia Pacific, 7 in North America, 3 in Middle East, 2 in South America, and 1 in Africa.
74% of their revenues are in currencies other than USD; this can be a risk when exchange rates
change.
CIT Group
CIT Group is an American financial holding company that has more than $65 billion in financing and
leasing assets. They provide financing, leasing and advisory services. CIT Group generates revenue by
earning interest on loans and investments. This in addition to collecting rent on the equipment they
lease out and earning income from services they provide. CIT Group has a total market share of
7.07%.
CIT Group Financing and Leasing Assets by Country

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Financial Ratio Analysis
Revenues
Global Payments Inc had a total revenue of
$2,774,000 in the year up to 31st
May 2015.
This is divided as follows: 59.7% in the United
States, 11.3% in Canada, 22.2% in Europe and
6.8% in the Asia-Pacific region.
Revenue grew by 8.6% in the FY 2015 despite
unfavourable currency conditions. As shown in
the graph, there has been steady revenue
growth in the last 5 years (CAGR of 11%) which
would be expected to continue as card
payments become more favourable as an
alternative to cash, between 2000 and 2012
debit card payments rose from 8.3 billion to 47
billion in the US.
Total Operating Expense
As the graph shows, Global Payments has
higher operating costs than the competitors
highlighted. This is because as Global
Payments is a service based company, the
more clients it has, the greater the operating
costs are likely to be.
When looking at costs of service, there was an
increase of 7.3%, but as a percentage of
revenue it fell from 37.3% to 36.8%. The same
is true for Selling, General and Administrative
Expenses, where an increase of 7.6% led to a
fall from 47.1% to 46.7% as a percentage of
revenue. This shows the increased operating
expense is offset by growing revenues.
2011 2012 2013 2014 2015
Global Payment Inc 1860 2294 2376 2554 2774
Euronet Worldwide
Inc
1161 1268 1413 1664 1772
CIT Group Inc 1791 1192.4 2408.1 2438.6
0
500
1000
1500
2000
2500
3000
Revenue($Millions)
Year
Revenues
Global Payment Inc Euronet Worldwide Inc
CIT Group Inc
2011 2012 2013 2014 2015
Global Payments Inc 1528 1896 2019 2147 2317
Euronet Worldwide
Inc
1083 1205 1295 1507 1567
CIT Group Inc 1008 2013 1068 759
0
500
1000
1500
2000
2500
TotalOperating
Expense(£millions)
Year
Total Operating Expense
Global Payments Inc Euronet Worldwide Inc
CIT Group Inc

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Net Profit Margin
As the graph shows, Global Payments has
had a stable net profit margin for the last
5 years, trending around the 10% mark.
This is greater than the similarly stable net
profit margin of Euronet and is far less
volatile than the net profit margin of CIT
Group.
This level is likely to be maintained in the
future as Revenue and Expenses grow at a
similar level.
Return on Equity
As shown in the graph, Global
Payments’ Return on Equity is
consistently higher than that of
Euronet and CIT. In addition over the
last 4 years, the ROE of Global
Payments has been growing at a
steady rate.
This suggests Global Payments has a
competitive advantage over its
competitors and is able to invest to in
expansion and new opportunities at a
greater rate.
2011 2012 2013 2014 2015
Global Payments Inc 11.24% 8.53% 9.09% 9.59% 10.02%
Euronet Worldwide
Inc
3.19% 1.66% 6.23% 6.13% 5.56%
CIT Group Inc 0.84% -49.65% 28.07% 46.34%
-60.00%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
Netprofitmargin
Year
Net profit margin
Global Payments Inc Euronet Worldwide Inc
CIT Group Inc
2011 2012 2013 2014 2015
Global Payments
Inc
20.92% 14.59% 20.38% 24.50% 34.51%
Euronet
Worldwide Inc
6.89% 3.80% 15.57% 14.50% 12.52%
CIT Group Inc 0.17% -7.03% 7.82% 12.75% 10.64%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
ReturnonEquity
Axis Title
Return on Equity
Global Payments Inc Euronet Worldwide Inc
CIT Group Inc

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Global Payments Inc Euronet Worldwide Inc CIT Group Inc
Income Statement
SG&A/Revenue 0.467 0.235 -
OPEX/Revenue 0.835 0.884 0.386
Tax Rate 0.259 0.305 -0.843
Net interest
expense/Debt
0.013 0.0009 0.000009
Balance Sheet
Working Capital 0.099 0.128 -
Financial Leverage 0.916 0.799 -
Returns and prof.
ROA 6.39% 4.65% 1.85%
ROE 34.51% 12.52% 10.64%
Multiples
P/E 23.60 38.97 4.75
Capital Structure
Beta 1.24 1.40 1.57

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Key risks
Risks
Given that Global Payments Inc is a provider of electronic services, there is a large technological risk,
such as software defects. However, this is also likely to be the case with competitors.
The slowdown in growth in emerging markets and China in particular may impact on the growth of
the company. However, as only 6.8% of Global Payment Inc’s investment is in Asia, this risk may be
limited to a small portion of consumer base.
Revenues of Global Payments Inc depend heavily on consumer spending. Therefore, if there is a
recession or macroeconomic shock, revenues may fall. However, this is also the case with competitors.
Furthermore, as Global Payments Inc operates in North America, Europe and Asia, if there is a fall in
demand in one market, it may be offset by growth in another.
Global Payment Inc is subject to a variety of regulations both within the US and based on the
companies they work with, such as MasterCard and Visa, which may impact upon growth.
There is a currency risk due to the fact that Global Payment Inc deals with cross border transactions.
However, the dollar is expected to remain stable relative to the pound, so this should not affect
investment.

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