A Fresh Look at FIS’s Valuation After Launching New Automated Financial Platforms

If you’ve been watching Fidelity National Information Services (FIS), the company has just rolled out two new platforms aimed at tackling some long-standing pain points for the financial sector. FIS announced the launch of its Optimized Reconciliation Service, an automated solution that promises to streamline the end-to-end reconciliation process for banks and corporations, making data management more reliable and efficient. In addition, the company introduced the Investor Services Suite, which helps accelerate investor onboarding and compliance for fund managers and financial institutions. This is a timely move given tougher regulations and the growing need for digitized workflows. These consecutive product launches are attracting investor attention as FIS works to position itself as a technological leader in capital markets infrastructure. However, the stock has not reflected this momentum. Shares are down around 10% both year-to-date and over the past year, with a longer-term trend that has seen them nearly halved over the last five years. Recent weeks have not reversed this direction, and although the company has reported improving revenue and income growth, broader market sentiment around FIS appears to remain cautious for now. With the recent introduction of new products and a multi-year decline in share price, the question remains: Is the market undervaluing FIS and its growth efforts, or is everything already factored into current prices?

Most Popular Narrative: 16.2% Undervalued

According to community narrative, Fidelity National Information Services is considered significantly undervalued based on robust growth expectations, margin improvement, and digital payments momentum. Analysts believe the company’s future earnings, operational streamlining, and global reach could drive meaningful upside from current prices.

"Increasing client demand for cloud-based and AI-powered fintech solutions, such as the launch of TreasuryGPT and Banker Assist, is allowing FIS to upsell higher-value, 'stickier' products to financial institutions modernizing their operations. This should support long-term revenue expansion and improved net margins."

Curious what’s fueling this bullish view? The narrative points to a leap in profitability, a future-oriented profit multiple, and sector-defining digital innovation. This is not your typical value case. Explore the full narrative to discover what kind of earnings improvements and growth assumptions are shaping this stock’s potential price.

Result: Fair Value of $85.61 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rapid fintech disruption and challenges from integrating acquisitions could threaten FIS's earnings growth and put pressure on future margins, potentially undermining bullish expectations.

Find out about the key risks to this Fidelity National Information Services narrative.

Another View: Valuing FIS from a Different Angle

Not everyone sees the same opportunity. Looking at FIS through the lens of our DCF model instead of market-based ratios, the stock is evaluated as undervalued. However, is it really that simple?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Fidelity National Information Services for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Fidelity National Information Services Narrative

If you see things differently or want to dive deeper on your own terms, you can easily craft your own narrative in just a few minutes. So why not do it your way?

A great starting point for your Fidelity National Information Services research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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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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