Fiserv Stock Near Crucial Support – Buy Signal?
Fiserv (FI) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($61.88 – $68.40), levels from which it has bounced meaningfully before. In the last 10 years, Fiserv stock received buying interest at this level 4 times and subsequently went on to generate 66.8% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 7/26/2017 | 1.8% | 6 |
| 9/29/2017 | 10.9% | 122 |
| 2/7/2018 | 14.9% | 37 |
| 3/23/2018 | 239.7% | 2537 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For FI Read Buy or Sell FI Stock to see how convincing this buy opportunity might be.
Love the FI stock? Great. But don’t get too attached. Stocks crash. High Quality Portfolio lets you navigate that risk.
Here are some quick data points for Fiserv that should help decision:
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- Revenue Growth: 6.7% LTM and 7.5% last 3 year average.
- Cash Generation: Nearly 24.4% free cash flow margin and 30.0% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for FI was 6.7%.
- Valuation: FI stock trades at a PE multiple of 10.6
For quick background, Fiserv provides payment and financial technology services, including point-of-sale merchant acquiring, digital commerce, general ledger management, and debit, credit, and prepaid card processing.
| FI | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Transaction & Payment Processing Services | – |
| PE Ratio | 10.6 | 23.7 |
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| LTM* Revenue Growth | 6.7% | 5.6% |
| 3Y Average Annual Revenue Growth | 7.5% | 5.3% |
| Min Annual Revenue Growth Last 3Y | 6.7% | -0.1% |
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| LTM* Operating Margin | 30.0% | 18.8% |
| 3Y Average Operating Margin | 26.7% | 18.2% |
| LTM* Free Cash Flow Margin | 24.4% | 13.4% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
This stock isn’t immune to big drops. It fell about 38% in the Dot-Com bubble and over 51% during the Global Financial Crisis. The 2018 correction and Covid sell-off brought declines around 16% and 38%, respectively. Even the recent inflation shock caused a 30% dip. Strong fundamentals matter, but when the market turns, sizable pullbacks happen across the board.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read FI Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.