Is Now the Right Time to Revisit Fiserv After Its 70% Price Drop in 2025?

• Wondering if Fiserv stock is undervalued or offers an opportunity? You are not alone; many investors are curious about what the numbers truly say.
• Despite some short-term volatility, up 1.0% in the last week but down 5.7% over the past month, Fiserv's shares have faced a challenging year, falling 70.2% year to date and 72.2% over the past 12 months.
• Several headlines have contributed to the big swings, including market shifts impacting fintech firms and increased competition from both established and emerging digital payment providers. These stories give important context to Fiserv's recent price moves and the shifting sentiment among investors.
• Fiserv currently scores 5 out of 6 on our undervaluation checks, highlighting its appeal for value-focused investors. We will break down what goes into this score and the different valuation approaches; plus, at the end of this article, we will explore a smarter way to think about Fiserv’s true value.

Find out why Fiserv's -72.2% return over the last year is lagging behind its peers.

Approach 1: Fiserv Excess Returns Analysis

The Excess Returns valuation model examines how efficiently Fiserv transforms its invested capital into profits above its cost of equity. This method identifies whether the company is generating returns that exceed what shareholders could expect from investing elsewhere at comparable risk.

Fiserv stands out with an average return on equity of 17.00%, which is well above its estimated cost of equity of $5.28 per share. The company’s book value per share is $46.78, projected to grow to a stable book value of $57.53 (based on weighted analyst estimates). Its stable earnings per share are estimated at $9.78, with excess returns calculated at $4.51 per share. These figures suggest Fiserv is delivering significantly more value than the equity required to fund its business.

The intrinsic value calculated from this approach is $133.82 per share. This compares favorably to the current market price and indicates the stock is 54.1% undervalued.

Result: UNDERVALUED

Our Excess Returns analysis suggests Fiserv is undervalued by 54.1%. Track this in your watchlist or portfolio, or discover 914 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Fiserv.

Approach 2: Fiserv Price vs Earnings

For profitable companies like Fiserv, the price-to-earnings (PE) ratio is a widely used valuation metric because it directly relates a company’s share price to its earnings. This ratio offers investors a straightforward way to gauge how much they are paying for each dollar of Fiserv’s earnings, making it especially useful for established businesses with stable earnings streams.

The “right” or fair PE ratio for a stock can depend heavily on expectations of future growth and the level of risk investors perceive. Generally, companies with higher expected earnings growth or lower perceived risk will trade at higher PE multiples, while slower-growth or riskier companies will command lower ratios. Comparing Fiserv’s current PE ratio against industry averages and similar peers helps provide some context, but it does not always capture the full picture.

At present, Fiserv trades at a PE multiple of 9.17x. This is well below the Diversified Financial industry average of 14.02x and significantly below the peer group average of 59.25x, suggesting the market is pricing in more caution for Fiserv compared to its sector. However, Simply Wall St's proprietary “Fair Ratio” for Fiserv is 18.04x. This Fair Ratio goes beyond basic benchmarks, as it factors in important elements such as Fiserv’s projected earnings growth, profit margins, market capitalization, exposure to risks, and its industry context. Because these elements offer a more comprehensive snapshot, the Fair Ratio is regarded as a stronger benchmark for assessing fair value than a simple peer or sector comparison.

Since Fiserv’s Fair Ratio (18.04x) is significantly higher than its actual PE (9.17x), the data suggests the stock is currently undervalued by this measure.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1437 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Fiserv Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. Narratives are where investors go beyond just numbers and ratios; they create and share their perspective on a company’s future by linking their story about the business to financial forecasts and an estimate of fair value. Instead of relying purely on consensus estimates or backward-looking models, Narratives allow you to define your own view of Fiserv’s growth, margins, and risks in a simple, structured way. This can make your investment case easier to follow and update.

Narratives are available right on the Simply Wall St Community page, used by millions of investors, so you can see (and benchmark) a range of different perspectives with ease. They help you decide when to buy or sell by turning your story and assumptions into a clear fair value, which you can instantly compare against the current market price. With Narratives, your investment thesis is always up to date and automatically adjusts as new information, such as news or earnings results, is released.

For example, on Fiserv, one investor may project rapid international growth and see a fair value as high as $250 per share, while another expects ongoing challenges and uses $125. Each Narrative captures a unique story and investment rationale behind the numbers.

Do you think there's more to the story for Fiserv? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com