WP

Worldpay Inc

Finance/Real Estate, TMT


Presented:01/19/2018
Price:$78.73
Cap:$12.82B
Current Price:no data
Cap:no data

Presented

Date01/19/2018
Price$78.73
Market Cap$12.82B
Ent Value$16.19B
P/E Ratio54.3x
Book Value$3.44
Div Yield0%
Shares O/S162.88M
Ave Daily Vol3,567,776
Short IntN/A

Current

Priceno data
Market Capno data
Worldpay, Inc. engages in payments processing technology and solutions. Its products include card machines, integrated point-of-sale, virtual terminal, card payments, mobile wallets, accounting integration, ATM services, Treasury services, PCI compliance, EMV and other. The company was founded on January 2018 and is headquartered in Symmes Township, OH.

Publicly traded companies mentioned herein: Alphabet Inc (GOOGL), JPMorgan Chase & Co (JPM), Netflix (NFLX), PayPal (PYPL), Worldpay Inc (WP)

Highlights

The Vantiv+Worldpay merger was completed on January 16, 2018, and with “new” Worldpay (WP) trading in the high $70s, the presenter is long the stock. Based on his due diligence and review of the financials, he believes management’s synergy guidance ($200MM annual run rate by the end of 2020, or three years post-close) to be conservative. There should be optionality around revenue synergies, and a fair amount of room for improvement on the cost side. He is forecasting $5.50-6.00 of EPS in 2020 (versus a $5 consensus EPS estimate in the same period), and applying an 18x forward multiple results in a $99-108 price target range looking out 12-18 months.

Revenue and Cost Synergies

To arrive at his EPS forecast, the presenter said he expects WP to exceed its synergy target by $50MM, and that the $5.50/share estimate includes no revenue synergies. His $6 EPS forecast assumes 150 bps of incremental revenue synergies. He noted that it should be possible for management to achieve some level of revenue synergies (perhaps in the 1-3% realm) by 2020.

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Idea Discussion

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