Fidelity National Information Services (FIS): Evaluating Valuation After Recent Share Price Uptick

Fidelity National Information Services (FIS) shares have quietly edged higher this month, rising about 6%. The stock remains well below its three-year highs. This has prompted some investors to reexamine its current valuation and future prospects.

See our latest analysis for Fidelity National Information Services.

While Fidelity National Information Services has rebounded with a 5.5% share price return over the past month, the momentum comes after a tough stretch, as its one-year total shareholder return still sits at -23.9%. The stock’s recent lift suggests that investors may be testing the waters again after a prolonged decline. However, its long-term performance indicates that meaningful improvement will take time.

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With shares lingering well below prior peaks despite a recent uptick, the big question emerges: Is Fidelity National Information Services trading at an attractive discount, or is the market already factoring in any turnaround potential?

Most Popular Narrative: 19.7% Undervalued

With Fidelity National Information Services closing at $67.79, the most widely followed narrative sets fair value at $84.39, reflecting a notable premium to the latest trading price. Investors are taking notice as analyst consensus suggests the potential for meaningful upside, dependent on key financial catalysts coming to fruition.

Execution of operational simplification (for example, Worldpay divestiture, focused acquisitions like Everlink and Global Payments Issuer), strong cost reduction programs, and improved working capital management are expected to lower operating expenses and drive EBITDA margin expansion, supporting higher future earnings.

Read the complete narrative.

What game-changing assumptions power this bullish target? There is a bold earnings growth trajectory and a margin leap that could rewrite the company's profit story. Which expectations really drive the gap between share price and fair value? If you're curious how these forecasts stack up, you'll want to see the specifics driving this valuation.

Result: Fair Value of $84.39 (UNDERVALUED)

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

However, persistent fintech competition and integration challenges from recent deals could still act as headwinds. These factors may potentially disrupt FIS’s improving outlook.

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

Another View: Multiples Send a Different Signal

Not all valuation models point in the same direction. Based on the price-to-sales ratio, Fidelity National Information Services trades at 3.4x, which is higher than the Diversified Financial industry average of 2.5x and above its peer average of 2.8x. Even our research suggests a fair ratio of 3.2x, meaning the stock currently commands a premium. This signals caution, as the market might already be pricing in much of the turnaround story. Could this premium make upside harder to capture, or does it show lasting confidence in FIS?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Fidelity National Information Services Narrative

If the current perspective doesn’t quite fit your own, or you’d rather dig into the numbers and build your own story, you’re free to shape a custom view in under three minutes with Do it your way

A great starting point for your Fidelity National Information Services research is our analysis highlighting 3 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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