Does Fiserv’s Share Slump Signal Opportunity After Recent JPMorgan Collaboration Announcement?

If you are on the fence about what to do with Fiserv stock right now, you are far from alone. With shares closing at $129.56, some investors see scars from recent market turbulence, while others spot a potential opportunity hiding in plain sight. Short-term returns have certainly looked rocky, with the stock down 1.7% in the last week and falling 6.1% over the past month. Year to date, Fiserv is off a steep 37.1%, and even its 1-year return stands at -27.4%.

Yet it is not all gloom for long-term holders. Over 3 and 5 years, Fiserv has quietly delivered total returns of 38.5% and 27.5%, showing that sentiment can shift with changing risk perceptions and market cycles. As investors sort through headlines about the competitiveness of the payment processing sector and evolving digital finance trends, Fiserv’s business model has attracted fresh scrutiny, and in some corners, renewed optimism.

So is Fiserv truly undervalued or simply out of favor? Based on our valuation scorecard, Fiserv earns a 4 out of 6, meaning it is undervalued in four of six key checks we track. That is enough to add it to the watch lists for value-oriented investors, but not quite a slam dunk. Next, let’s break down the numbers behind these valuation methods, and stick around, because I will reveal an even more insightful approach to understanding what Fiserv is really worth at the end of this article.

Why Fiserv is lagging behind its peers

Approach 1: Fiserv Excess Returns Analysis

The Excess Returns valuation approach measures the value Fiserv creates above the cost of its shareholders’ equity. In practical terms, this model looks at how much profit the company generates, after accounting for what investors require as a minimum acceptable return, and projects this difference into the future. The aim is to capture the company’s ability to deliver value beyond its net assets, an especially useful lens for financial services firms like Fiserv.

According to analyst projections, Fiserv’s book value stands at $46.35 per share, while stable earnings per share (EPS) are estimated at $12.74, derived from a consensus of six analysts focusing on future return on equity. The company’s average return on equity is a robust 24.49%, far above typical industry levels. With a cost of equity pegged at $4.33 per share, Fiserv is posting excess returns of $8.41 per share. Looking ahead, the stable book value is expected to reach $52.02 per share, based on four analyst estimates.

The intrinsic value derived from this excess returns analysis is $212.37 per share, compared to the latest price of $129.56. This suggests Fiserv is trading at a 39.0% discount to its estimated intrinsic worth, implying notable upside potential for value-oriented investors.

Result: UNDERVALUED

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

Our Excess Returns analysis suggests Fiserv is undervalued by 39.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Fiserv Price vs Earnings

The Price-to-Earnings (PE) ratio is widely used for evaluating profitable companies like Fiserv, as it provides a clear view of how much investors are willing to pay for each dollar of current earnings. This metric is especially relevant for firms with stable profits because it reflects both near-term performance and future expectations.

What constitutes a “normal” or “fair” PE ratio depends on several factors. Companies with higher expected earnings growth, lower perceived risk, and robust profitability often justify elevated PE multiples. Those facing greater uncertainty or slower growth tend to trade at a discount. Therefore, a single number rarely tells the full story without the right context.

Fiserv currently trades at a PE ratio of 20.8x. Compared to the average peer multiple of 15.7x and the Diversified Financial industry average of 16.8x, Fiserv’s valuation appears higher than most direct competitors. However, Simply Wall St’s proprietary “Fair Ratio” model, which blends growth outlook, profit margins, risk profile, industry specifics, and company size, suggests that a PE of 21.6x is appropriate. Unlike simple peer or industry comparisons, this Fair Ratio provides a more nuanced evaluation by factoring in what truly drives long-term returns.

With Fiserv's actual PE ratio just a notch below its Fair Ratio, shares are currently priced about right based on what the company brings to the table.

Result: ABOUT RIGHT

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

Upgrade Your Decision Making: Choose your Fiserv Narrative

Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your investment story. It is a structured way to combine your view on Fiserv’s future with the numbers that drive its value, including your estimates for revenue, margins, and profitability. Rather than seeing Fiserv as just a collection of financial metrics, a Narrative empowers you to connect what you believe about its business, strategy, or industry trends directly to a live fair value calculation.

Narratives make investing practical and personal by letting you create, adjust, and share your perspective on Simply Wall St’s Community page, where millions of investors weigh in and update their views as news breaks or results are released. By comparing the dynamically updated Fair Value from your Narrative to Fiserv’s current share price, it is easier to decide when to buy, hold, or sell, and to see how others’ assumptions differ from yours.

For example, one investor’s bullish Narrative expects global digital payments expansion and stronger margins, arriving at a fair value of $250 per share. Another, focusing on risk from competition and tech adoption, sees fair value closer to $125. Narratives reveal these differences, helping you invest with clarity and confidence.

Do you think there's more to the story for Fiserv? Create your own Narrative to let the Community know!

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.

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