Could Fiserv Stock’s Cash Flow Spark the Next Rally?
We think Fiserv (FISV) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market.
What Is Happening With FISV
FISV may be up 1.5% so far this year but is still available at a significant discount to its 3-month, 1-year, and 2-year highs. This can be attributed to recalibrated 2025 organic revenue growth expectations and heightened technology investments to correct past underinvestment. These efforts to address competitive gaps pressured near-term profitability forecasts.
The stock may not reflect it, but here is what’s going well for the company. Growth is fueled by AI integrations with Microsoft for client solutions and productivity, plus expanded Clover and Mastercard agentic commerce. Despite Q3 2025’s low organic revenue growth, strong cash generation persists, backed by a moderate 1.20 debt-to-equity ratio and recent insider share purchases.
FISV Has Strong Fundamentals
- Cash Yield: Fiserv offers an impressive cash flow yield of 12.5%.
- Growing: Revenue growth of 5.2% over the last twelve months means that the cash pile is going to grow.
- Valuation Discount: FISV stock is currently trading at 46% below its 3-month high, 71% below its 1-year high, and 71% below its 2-year high.
Below is a quick comparison of FISV fundamentals with S&P medians.
| FISV | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Transaction & Payment Processing Services | – |
| Free Cash Flow Yield | 12.5% | 3.9% |
| Revenue Growth LTM | 5.2% | 6.4% |
| Operating Margin LTM | 28.7% | 18.8% |
| PS Ratio | 1.7 | 3.3 |
| PE Ratio | 10.2 | 24.1 |
| Discount vs 3-Month High | -46.1% | -3.8% |
| Discount vs 1-Year High | -71.3% | -8.6% |
| Discount vs 2-Year High | -71.3% | -11.0% |
*LTM: Last Twelve Months
But What About The Risk Involved?
While FISV stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. FISV fell roughly 38% in the Dot-Com crash and over 51% during the Global Financial Crisis. The 2018 correction and inflation shock saw drops of about 16% and 30%, respectively. Even the Covid pandemic triggered a near 38% dip. So, despite strong fundamentals, FISV isn’t immune to sharp sell-offs when market stress hits.
If you want to see more details, read Buy or Sell FISV Stock.
Other Stocks Like FISV
Not ready to act on FISV? You could consider these alternatives:
We chose these stocks using the following criteria:
- Greater than $2 Bil in market cap
- Positive revenue growth
- High free cash flow yield
- Meaningful discount to 3M, 1Y, and 2Y highs
A portfolio that was built starting 12/31/2016 with stocks that fulfill the criteria above would have performed as follows:
- Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
- Win rate (percentage of picks returning positive) of >70% for both 6-month and 12-month periods
The Best Investors Think In Portfolios
Stocks can jump or crash, but long-term success comes from staying invested. The right portfolio helps you ride gains and cushion single stock drops
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.