| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 2/6 |
| Past Performance | 5/6 |
| Financial Health | 3/6 |
| Dividends | 0/6 |
FISV Stock Overview
Fiserv, Inc., together with its subsidiaries, provides payment and financial services technology worldwide.
Fiserv, Inc. Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$93.57 |
| 52 Week High | US$111.84 |
| 52 Week Low | US$87.03 |
| Beta | 0.88 |
| 1 Month Change | -7.76% |
| 3 Month Change | 1.07% |
| 1 Year Change | -14.77% |
| 3 Year Change | -11.48% |
| 5 Year Change | 46.80% |
| Change since IPO | 19,729.24% |
Recent News & Updates
Indian Oil taps Fiserv to enhance customer payment experience
Indian Oil, India's flagship national energy major, has tapped global fintech and payments firm Fiserv (NASDAQ:FISV) to enhance customer payment experience. IndianOil customers can now pay with their choice of multiple payment platforms through smart POS terminals deployed at over 15,000 IndianOil retail fuel outlets across the country. Through the Carat operating system from Fiserv, the oil company gains access to a cloud-based platform that enables the processing of debit cards, credit cards, FASTag-enabled payments, QR payments, UPI instant real-time payments, and digital wallets.
Fiserv (NASDAQ:FISV) Has A Pretty Healthy Balance Sheet
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...
Fiserv: Bouncing Back With Clover Leading The Way
Fiserv's acquisition of First Data continues to pay dividends with both Clover and Carat continuing to grow, particularly Clover, which is exceeding expectations. The company's continued capital allocation of buying add-ons, and returning capital via buybacks are growing shareholder value. Currently, I estimate Fiserv is trading below fair value, giving us a chance to buy a great company. Fiserv (FISV) reported better-than-expected growth in the second quarter with solid results. Overall YoY growth organic growth jumped to 12%, well over expectations. I still believe the shares of Fiserv remain undervalued, with much of the market underestimating Fiserv's long-term growth prospects. Fiserv's recent (2019) acquisition of FirstData, including the Clover and Carat platforms, continue to offer great growth opportunities. Along with many other irons in the fire, payments-wise, including Zelle. Business Overview For those unfamiliar with Fiserv, they are a legacy fintech player with strength in the core banking ecosystem, exciting stuff, I know. But with the recent addition of platforms like Clover and Carat, they started gaining a leading position in payment acceptance and processing. Fiserv operates through three segments: Acceptance Fintech Payments Fiserv's legacy business operates around the core banking offerings, which occupy a space in the fintech segment. Core banking is plumbing for banks, enabling items such as maintaining deposits, loan accounts, and posting daily transactions. Fiserv remains the market leader in the space, among competitors Jack Henry (JKHY) and Fidelity National Service (FIS), second and third, respectively. The legacy core banking systems remain quite sticky; it's difficult for customers to switch banks, imagine the process for banks. Fiserv's legacy core offerings allow for wider margins, with the cost advantages and ability to scale newer services when added. After the FirstData merger, Fiserv added a new segment, merchant acquiring, focusing on the Clover system. The new segment now occupies 41% of Fiserv's total revenues, growing 14.1% year over year. Chart courtesy of author (Author excel spreadsheet) The fintech and payments segments also experienced growth at a slower pace, 6.5% and 6.8%, respectively. Revenues Fiserv saw organic revenue growth of 12% for the second quarter, along with adjusted earnings growth of 14%, at $1.56 per share and an adjusted operating margin of 33.5%. The company also exceeded expectations on merger revenue synergies of $600 million two years early. Acceptance Segment The acceptance segment leads the way for Fiserv, with Clover becoming the number one path to growth. The merchant segment saw organic growth of 17% for the second quarter and 18% year-to-date. Fiserv Acceptance Revenues (stratosphere.io) Fiserv's merchant segment remains the number three US-based acquirer, with $27.2 billion in annual transactions for around 6 million merchants. Two-thirds of the revenue comes from SMBs (small to medium businesses), another 20% from mid-to-enterprise merchants, and the final 15% from wholesale processing. Chart (Nilsonreport.com) The key to growth for the merchant acceptance segment and Fiserv continues to be Clover. Acquiring Clover in the First Data merger allowed Fiserv to move up the payments food chain by focusing on the SMB business segment. Clover is a horizontal acceptance platform with modules for specific verticals, such as restaurants. Clover competes with a large group of players in different niches. For example, Toast (TOST) in the restaurant space, Shopify (SHOP) in e-commerce, and Block (SQ) and PayPal (PYPL) in SMBs. Clover Integrations (Fiserv Investor Briefing March 8, 2022) Fiserv Investor Briefing on Merchant Acceptance, Mar 8, 2022 Clover grew revenues by 24% in the quarter and 30% year to date, driven by volume growth of 27% of over $233 billion in annualized GPV (gross payment volume). The Clover solution offers a combination of: Software and services Payments Hardware The recent BentoBox acquisition is now contributing to Clover's restaurant growth. With the integration, the company reports a 3x increase in average revenue per user than standalone Clover in restaurants. The company's ISV (independent software vendors) through Clover Connect grew 39% YoY and 44% year-to-date. They also signed 45 ISVs during the quarter, giving them 89 in total. The company has five strategic initiatives it is putting forward to spur growth in Clover: Software and services penetration Vertical specialization Omnichannel Distribution International expansion We can see these initiatives working based on the growing volume and revenues. Clover has grown from $0.8 billion in 2019 to $1.3 billion in 2021, a 27% CAGR. Based on rough math, Clover grew 39% in Q1 from a $1.3 billion base, giving them $930 million in revenues year-to-date and a run rate of $1.86 billion if the growth remains steady. The current run rate for Clover will give it an approximately 10% share of company revenues, up from $0 only two years ago. Impressive, very impressive. In the interest of being brief, Clover is the growth engine for Fiserv and has performed quite well to date. Carat is the other side of the coin of growth for Fiserv, with 22% revenue growth for the quarter. Carat offers Omni/e-commerce solutions for merchants and physical POS systems. Carat generated $450 million in annual revenues for 2021 and has seen a 12% CAGR since 2019. Revenue growth for Fiserv of 9-11%, based on the growth driven by the Merchant Segment, particularly Clover and Carat, remains likely, with analysts predicting revenue growth of 6-7% over the next few years. Operating Margins Fiserv's margins pre-First Data merger were in the high 20s to low 30s, but since the merger, they have hovered around: 2019 – 15.65% 2020 – 12.66% 2021 – 14.54% Much of Fiserv's margin compression stems from the merger-related acquisition costs, which the company expects to pay off in the next five years. Chart courtesy of stratosphere.io (stratosphere.io) Among other impacts are cost inflation from both labor and material costs for Clover, along with investments made related to Bentobox and Finxact and reinvestments. But if we dig deeper, we see the individual segments performing well and growing margins. For example, the merchant segment averages 30.9% adjusted margins compared to 2021's adjusted margins of 29.7%. Adjusted margin averages for the last five quarters for each segment look like this: Merchant Acceptance – 30.9% Payments and Network – 44.2% compared to 2021's of 43% Financial Tech – 35.9% compared to 34.9% As the company moves away from the First Data acquisition and the impact of the acquisition-related cost diminishes, I believe Fiserv will achieve higher margins based on the growing revenue mix of Clover and Carat at around 34%. Capital Allocation Fiserv continues to put capital to work, as evidenced by recent acquisitions of Ondot, Bentobox, and Finxact, a leading developer of cloud-native banking solutions. Fiserv also continues to return capital via buybacks, with over $2.6 billion spent on 23.3 million shares in FY21, repurchasing almost $1 billion in H1'22, and spending an additional $400 million in July alone, and $500 million on 5.1 million shares in the second quarter. They are on track to reduce shares by almost 3% by year's end, thus helping grow earnings, which is all part of Fiserv's strategy. The nice part of the buybacks, particularly this year, was many were bought during the market pullback, lowering the prices paid for those shares and increasing the returns for shareholders. The one area I would love to see Fiserv work down remains the long-term debt, which sits higher than I would like at $20.9 billion. The company's current debt to adjusted EBITDA sits at 0.3x, in line with Fiserv's target leverage. Risks Ongoing risks Fiserv faces continue to be the economy overall. As a payment processor, they run the risk of a deteriorating economy driving down consumers' buying stuff, which could threaten the continued growth of Clover.
Shareholder Returns
| FISV | US IT | US Market | |
|---|---|---|---|
| 7D | -4.5% | -2.7% | -2.5% |
| 1Y | -14.8% | -39.1% | -23.2% |
Return vs Industry: FISV exceeded the US IT industry which returned -39.1% over the past year.
Return vs Market: FISV exceeded the US Market which returned -23.2% over the past year.
Price Volatility
| FISV volatility | |
|---|---|
| FISV Average Weekly Movement | 3.5% |
| IT Industry Average Movement | 8.0% |
| Market Average Movement | 6.8% |
| 10% most volatile stocks in US Market | 15.5% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: FISV is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: FISV's weekly volatility (3%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1984 | 44,000 | Frank Bisignano | https://www.fiserv.com |
Fiserv, Inc., together with its subsidiaries, provides payment and financial services technology worldwide. The company operates through Acceptance, Fintech, and Payments segments. The Acceptance segment provides point-of-sale merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Carat, an omnichannel commerce solution; Clover, a cloud-based point-of-sale and business management platform; and Clover Connect, an independent software vendors platform.
Fiserv, Inc. Fundamentals Summary
| FISV fundamental statistics | |
|---|---|
| Market Cap | US$59.85b |
| Earnings (TTM) | US$2.03b |
| Revenue (TTM) | US$17.01b |
29.5x
P/E Ratio3.5x
P/S RatioIs FISV overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| FISV income statement (TTM) | |
|---|---|
| Revenue | US$17.01b |
| Cost of Revenue | US$8.27b |
| Gross Profit | US$8.74b |
| Other Expenses | US$6.71b |
| Earnings | US$2.03b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 3.17 |
| Gross Margin | 51.38% |
| Net Profit Margin | 11.92% |
| Debt/Equity Ratio | 64.9% |
How did FISV perform over the long term?
See historical performance and comparison