In analyzing the chart of Global Payments (GPN), I noticed that it is approaching a key level of resistance.
GPN is a leading provider of payment processing and software solutions and focuses on serving small and midsize merchants. Its payment technology solutions enable its customers to accept card, electronic, check and digital-based payments. Its software solutions help businesses streamline operations.
GPN’s agreement with Amazon’s (AMZN) AWS expands its reach and provides a strong global marketing partnership. Its agreement with Google (GOOGL) will advance its technology-enabled distribution strategy. The company’s cost-cutting initiatives have helped to grow its margins and its cash flows have been improving.
The company has a healthy balance sheet with $1.9 billion in cash compared with $1.2 billion in short-term debt. In its most recent reported quarter, earnings rose 11.1%, but revenue fell 3% year over year.
GPN’s stock is overpriced based on trailing P/E, but only slightly overvalued when looking at its forward P/E of 26.95. The stock has shown mixed performance year to date, but has been trending up since March, leading to a Momentum Grade of B in our POWR Ratings system.
Take a look at the 1-year chart of GPN below with added notations:
Chart of GPN provided by TradingView
GPN has been pushing its way higher ever since hitting its $175 low back in February. The stock has recently stalled at the $215 resistance (red), just as it did back in December and March.
A solid close above that $215 area should lead to much higher prices for GPN. GPN’s $215 resistance level is also a 52-week high. A possible long position on the stock would be on a breakout above that level with a protective stop placed under it.
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GPN shares rose $0.25 (+0.12%) in premarket trading Wednesday. Year-to-date, GPN has declined -0.61%, versus a 10.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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