Why Global Payments (GPN) Deserves a Spot in Long-Term Portfolios Despite Its Hold Rating

In an era marked by economic uncertainty and shifting market dynamics, the challenge for investors lies in distinguishing between short-term volatility and long-term value. Global Payments (GPN), a leader in the digital commerce and payment processing sector, presents a compelling case for patient capital. Despite its Zacks Rank #3 (Hold) designation, the company's robust momentum indicators, earnings strength, and strategic positioning in a consolidating industry make it a worthy addition to long-term portfolios. This analysis delves into the interplay of momentum investing, fundamentals, and contrarian logic to build a case for GPN.

Momentum Investing: A Case for Resilience

Momentum investing thrives on the principle that stocks with strong recent performance will continue to outperform. Global Payments exemplifies this with a Zacks Momentum Score of A for 2025 according to Zacks, reflecting its ability to adapt to evolving market conditions. Over the past 60 days, six analysts revised their fiscal 2025 earnings estimates higher, pushing the Zacks Consensus Estimate for EPS to $12.18. This upward revision underscores confidence in GPN's operational execution and its capacity to exceed expectations.

While the stock has declined 26.5% year-to-date according to Yahoo Finance, recent price action tells a different story. In the past month alone, GPN surged 11.9%, outpacing the industry's 9.1% growth. Such volatility is not uncommon in the payments sector, where macroeconomic headwinds and regulatory shifts often create short-term noise. However, for momentum investors, the key lies in identifying companies with durable competitive advantages-something GPN has demonstrated through its 12% year-over-year adjusted EPS growth in Q3 2025 according to investor reports.

Earnings Strength and Strategic Fundamentals

Beyond momentum, GPN's fundamentals are equally compelling. The company's Q3 2025 results highlighted its operational resilience: adjusted operating margins expanded by 110 basis points to 45%, and it generated $784 million in adjusted free cash flow according to investor reports. These metrics reflect disciplined cost management and pricing power, critical attributes in a sector where margins are often under pressure.

Moreover, GPN's strategic acquisitions are paying dividends. The pending closure of its Worldpay acquisition in Q1 2026 according to Investing.com will position it as a leading merchant solutions provider, enhancing scale and cross-selling opportunities. This consolidation aligns with broader industry trends, where larger players are leveraging technology and data analytics to capture market share. As noted by a report from Nasdaq, such moves are essential for sustaining growth in an increasingly competitive landscape according to Nasdaq.

Contrarian Positioning and the VGM Score

The Zacks Value, Growth, and Momentum (VGM) Score offers a holistic view of a company's investment potential. GPN's 2025 VGM Score of A according to Nasdaq underscores its strength across all three dimensions. Its average earnings surprise of +1.9% according to Finviz demonstrates consistency in outperforming forecasts-a trait that often goes unnoticed in a "Hold"-rated stock.

For long-term investors, this presents a contrarian opportunity. A Hold rating typically signals market neutrality, but it does not negate a company's underlying strengths. GPN's ability to balance growth according to Q3 results (projected 10-11% adjusted EPS growth for 2025) with value (a forward P/E ratio that remains attractive relative to peers according to Yahoo Finance) makes it a rare hybrid. In a market where many high-growth stocks trade at premium valuations, GPN's disciplined approach to capital allocation and margin expansion offers a more sustainable path.

The Case for Patience

The payments industry is undergoing a structural transformation, driven by digital adoption and regulatory changes. While short-term volatility is inevitable, GPN's strategic focus on innovation and scale positions it to benefit from these shifts. Its reaffirmed full-year 2025 guidance-5-6% constant currency adjusted net revenue growth according to Q3 results-reflects confidence in its ability to navigate macroeconomic challenges.

For investors with a multi-year horizon, the key is to look beyond the Hold rating and focus on the company's ability to generate consistent cash flows, reinvest in high-return opportunities, and maintain a strong balance sheet. As Zacks notes, GPN's strong Growth and Momentum Style Scores according to Nasdaq suggest that its fundamentals are likely to outperform in the medium to long term.

Conclusion

Global Payments may not be a high-flying growth stock, but its combination of momentum, earnings strength, and strategic positioning in a consolidating industry makes it a compelling long-term holding. For patient investors, the current Hold rating represents an opportunity to acquire a company with durable competitive advantages at a reasonable valuation. In a world where certainty is elusive, GPN's disciplined execution and forward-looking strategy offer a rare blend of resilience and potential.