Reviewing Farfetch (NYSE:FTCH) and Global Payments (NYSE:GPN)

Global Payments (NYSE:GPN) and Farfetch (NYSE:FTCH) are both large-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Global Payments and Farfetch, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Payments 0 3 17 0 2.85
Farfetch 0 0 11 0 3.00

Global Payments currently has a consensus price target of $220.35, indicating a potential upside of 35.93%. Farfetch has a consensus price target of $62.36, indicating a potential upside of 52.14%. Given Farfetch’s stronger consensus rating and higher possible upside, analysts plainly believe Farfetch is more favorable than Global Payments.

Insider and Institutional Ownership

86.8% of Global Payments shares are held by institutional investors. Comparatively, 83.8% of Farfetch shares are held by institutional investors. 1.0% of Global Payments shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Global Payments has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, Farfetch has a beta of 3.27, indicating that its stock price is 227% more volatile than the S&P 500.

Valuation & Earnings

This table compares Global Payments and Farfetch’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Global Payments $7.42 billion 6.41 $584.52 million $6.01 26.97
Farfetch $1.67 billion 8.67 -$3.35 billion ($9.75) -4.20

Global Payments has higher revenue and earnings than Farfetch. Farfetch is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Global Payments and Farfetch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Payments 10.83% 7.70% 4.72%
Farfetch -111.96% -1,281.44% -57.26%

Summary

Global Payments beats Farfetch on 10 of the 14 factors compared between the two stocks.

Global Payments Company Profile

Global Payments, Inc. engages in the provision of payment technology and software solutions. It operates through the following segments: Merchant Solutions, Issuer Solutions and Business & Consumer Solutions. The Merchant Solutions segment provides payments technology and software solutions to customers globally. It also provides a variety of value-added services, including specialty point-of-sale solutions, analytic and engagement tools, payroll services and reporting that assist customers with driving demand. The Issuer Solutions segment provides solutions that enable financial institutions and other financial service providers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform. It also provides commercial payments and e Payables solutions that support business-to-business payment processes for businesses and governments. The Business and Consumer Solutions segment provides general purpose reloadable prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the under banked and other consumers and businesses in the United States through Netspend bran

Farfetch Company Profile

Farfetch Ltd. engages in the retail of fashion and luxury goods. It offers womenswear, menswear, kidswear, vintage, fine watches, and fine jewelry. The company was founded by José Manuel Ferreira Neves in 2007 and launched in 2008 and is headquartered in London, the United Kingdom.

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