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Why Is Fiserv (FI) Up 5.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Fiserv (FI - Free Report) . Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fiserv due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fiserv Beat Q4 Earnings Estimates
Fiserv reported mixed fourth-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the mark.
Adjusted earnings per share (excluding 40 cents from non-recurring items) of $2.19 exceeded the consensus mark by 1.9% and increased 14.7% year over year. Adjusted revenues of $4.64 billion missed the consensus estimate by 1.1% but increased slightly on a year-over-year basis.
Organic revenue growth was 12% in the quarter, driven by 24% and 4% growth in the Acceptance and Payments segments, respectively.
Other Quarterly Details
Processing and services’ revenues of $4.03 billion increased 8.3% year over year and beat our estimate by 1.3%. Revenues in the Product segment were $892 million, down 1.9% from the year-ago figure and missed our estimate by 1.5%.
Revenues from Merchant Acceptance were $2.11 billion, up 13.4% from the year-ago figure, beating our estimate by 7.1%. The Fintech segment reported revenues of $800 million, indicating a 2.8% decline from the year-ago figure and missed our estimated $827.2 million. The Payments segment reported revenues of $1.72 billion, reflecting growth of 3%. The figure compares with our estimated $1.81 billion.
The operating margin from the Merchant acceptance segment was 38.8%, up from the year-ago figure of 34.8%. Adjusted operating margin from the Payments segment was 51% compared with the year-ago figure of 48.5%. Operating margin from the Fintech segment was 37.9%, down from the year-ago 41.3%.
Balance Sheet and Cash Flow
Fiserv exited the fourth quarter of 2023 with cash and cash equivalents of $1.20 billion. Long-term debt was $22.36 billion. FISV generated $1.6 billion in net cash from operating activities while free cash flow was $1.3 billion. Capital expenditures were $354 million. The company repurchased 8.6 million shares for $1 billion in the quarter.
2024 Guidance
Adjusted earnings per share are anticipated to be in the range of $8.55-$8.7. The company anticipates the earnings per share growth to be in the band of 14-16%. FI expects total revenues to grow 6.5-8.5% while organic revenues are expected to grow 15-17% year over year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Fiserv has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fiserv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Fiserv belongs to the Zacks Financial Transaction Services industry. Another stock from the same industry, MasterCard (MA - Free Report) , has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
MasterCard reported revenues of $6.55 billion in the last reported quarter, representing a year-over-year change of +12.6%. EPS of $3.18 for the same period compares with $2.65 a year ago.
MasterCard is expected to post earnings of $3.23 per share for the current quarter, representing a year-over-year change of +15.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
MasterCard has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is Fiserv (FI) Up 5.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Fiserv (FI - Free Report) . Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Fiserv due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Fiserv Beat Q4 Earnings Estimates
Fiserv reported mixed fourth-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the mark.
Adjusted earnings per share (excluding 40 cents from non-recurring items) of $2.19 exceeded the consensus mark by 1.9% and increased 14.7% year over year. Adjusted revenues of $4.64 billion missed the consensus estimate by 1.1% but increased slightly on a year-over-year basis.
Organic revenue growth was 12% in the quarter, driven by 24% and 4% growth in the Acceptance and Payments segments, respectively.
Other Quarterly Details
Processing and services’ revenues of $4.03 billion increased 8.3% year over year and beat our estimate by 1.3%. Revenues in the Product segment were $892 million, down 1.9% from the year-ago figure and missed our estimate by 1.5%.
Revenues from Merchant Acceptance were $2.11 billion, up 13.4% from the year-ago figure, beating our estimate by 7.1%. The Fintech segment reported revenues of $800 million, indicating a 2.8% decline from the year-ago figure and missed our estimated $827.2 million. The Payments segment reported revenues of $1.72 billion, reflecting growth of 3%. The figure compares with our estimated $1.81 billion.
The operating margin from the Merchant acceptance segment was 38.8%, up from the year-ago figure of 34.8%. Adjusted operating margin from the Payments segment was 51% compared with the year-ago figure of 48.5%. Operating margin from the Fintech segment was 37.9%, down from the year-ago 41.3%.
Balance Sheet and Cash Flow
Fiserv exited the fourth quarter of 2023 with cash and cash equivalents of $1.20 billion. Long-term debt was $22.36 billion. FISV generated $1.6 billion in net cash from operating activities while free cash flow was $1.3 billion. Capital expenditures were $354 million. The company repurchased 8.6 million shares for $1 billion in the quarter.
2024 Guidance
Adjusted earnings per share are anticipated to be in the range of $8.55-$8.7. The company anticipates the earnings per share growth to be in the band of 14-16%. FI expects total revenues to grow 6.5-8.5% while organic revenues are expected to grow 15-17% year over year.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Fiserv has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fiserv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Fiserv belongs to the Zacks Financial Transaction Services industry. Another stock from the same industry, MasterCard (MA - Free Report) , has gained 2.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
MasterCard reported revenues of $6.55 billion in the last reported quarter, representing a year-over-year change of +12.6%. EPS of $3.18 for the same period compares with $2.65 a year ago.
MasterCard is expected to post earnings of $3.23 per share for the current quarter, representing a year-over-year change of +15.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
MasterCard has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.