FDC
First Data Corp.
TMT, Finance/Real Estate
01/22/2018
Presented
| Date | 01/19/2018 |
| Price | $18.00 |
| Market Cap | $16.99B |
| Ent Value | $38.11B |
| P/E Ratio | 23.68x |
| Book Value | $2.27 |
| Div Yield | 0% |
| Shares O/S | 944.00M |
| Ave Daily Vol | 6,256,133 |
| Short Int | 7.57% |
Current
| Price | no data |
| Market Cap | no data |
| First Data Corp. provides commerce-enabling technology and solutions. It provides secure and innovative payment technology and services. The company operates through three business segments: Global Business Solutions, Global Financial Solutions and Network & Security Solutions. The Global Business Solutions segment provides retail point-of-sale merchant acquiring and eCommerce services. This segment also provides next generation offerings, such as mobile payment services, web store-in-a-box solutions and cloud-based clover point-of-sale operating system. The Global Financial Solutions segment provides credit solutions for bank and non-bank issuers, such as credit and retail private-label card processing; and licensed financial software systems, such as VisionPLUS bank processing application and lending solutions. This segment also offers related services, including card personalization and embossing, statement printing, client service and remittance processing. The Network & Security Solutions segment provides EFT network solutions, such as STAR Network and debit card processing solutions. It also offers stored value network solutions, including money network, ValueLink, Gyft, and transaction wireless; and security and fraud solutions, such as TransArmor and TeleCheck. The company's other services include mobile payments, eCommerce and prepaid solutions, as well as payment processing, fraud protection and authentication solutions, online banking, check guarantee and verification services and point-of-sale services to its customers. First Data was founded in 1971 and is headquartered in Atlanta, GA. |
Publicly traded companies mentioned herein: First Data Corp (FDC), Global Payments Inc (GPN), KKR & Co LP (KKR), Worldpay Inc (WP)
Highlights
Despite negativity surrounding First Data Corp’s (FDC) growth prospects and leverage profile, the presenter is long at $17, and views the stock as “too cheap” compared to its global peers. In his opinion, the North America acquiring market is stabilizing, should return to growth over the next two years, and management will [continue to] use FCF to delever the balance sheet. Once investors start to value the company based on EPS, as opposed to EBITDA, the “massive” valuation discount will erode. If his model is accurate, FDC can achieve its leverage target (4x) by 2019 (down from ~6x today), and EPS could reach $1.90-2.00 by 2020. Applying a reasonable, mid-teens multiple to this estimate results in a $28-30 price objective (over 12-18 months).
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