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Global Payments Inc. (GPN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Global Payments Inc. (GPN)

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Intrinsic Value (DCF)

Current$74.99
→
Intrinsic$316.19
+322%
$197.46$316.19$541.52
Market implies 1% growth for 5 years
DCF analysis suggests GPN could have 322% upside at 23% growth — verify assumptions match your view.
At $75, the market prices in only 1% growth — below historical 23%, suggesting low expectations.
Range: Bear $197 → Bull $542. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →19%21%23%25%
8%$401$438$477$519
10%$264$289$316$345
12%$188$207$227$249
14%$140$155$171$188

Bull Case

  • Bull case ($542) offers 622% upside at 28% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (23%)

Bear Case

  • Bear case ($197) with 19% growth, 12% discount rate
  • Using 23% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$3.52B
Year 2$4.35B
Year 3$5.36B
Year 4$6.61B
Year 5$8.15B
Terminal$119.92B

📐 Model Inputs

Growth Rate23.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.86BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is GPN stock undervalued or overvalued?
🟢 UNDERVALUED

GPN trades at $74.99 vs. our DCF-derived intrinsic value of $272.26, implying +253% upside. At a 10.0% WACC and 23.3% projected FCF growth, the market appears to be underpricing the present value of GPN's future cash flows. The bear case ($159.30) still suggests upside, providing margin of safety.

What is GPN's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.86B, projected at 23.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $14.28B net debt and dividing by 0.25B shares: Bear $159.30 | Base $272.26 | Bull $438.61. Current price $74.99 implies +253% to base case.

How is GPN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 23.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($83.66B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.