Fiserv Stock: Strong Cash Flow Poised for a Re-Rating?
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 stock is available at a significant discount to its 3-month, 1-year, and 2-year highs. This can be attributed to revised 2025 organic revenue projections and increased technology investments tempering near-term profitability. Furthermore, the banking division’s revenue declined, and there are noted concerns regarding the Clover platform, including client satisfaction and earlier growth representations.
The stock may not reflect it yet, but here is what’s going well for the company: Clover platform adoption and new AI integrations with Microsoft and ServiceNow are enhancing client solutions. Consistent cash generation persists, supported by a low 1.15 debt-to-equity ratio. Management’s “One Fiserv” plan and leadership changes aim to restore momentum, with 2026 positioned as a transition year for future mid-single-digit organic revenue growth.
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FISV Has Strong Fundamentals
- Cash Yield: Fiserv offers an impressive cash flow yield of 13.2%.
- 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 7.0% below its 3-month high, 73% below its 1-year high, and 73% 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 | 13.2% | 3.9% |
| Revenue Growth LTM | 5.2% | 6.2% |
| Operating Margin LTM | 28.7% | 18.8% |
| PS Ratio | 1.7 | 3.4 |
| PE Ratio | 9.7 | 24.1 |
| Discount vs 3-Month High | -7.0% | -4.6% |
| Discount vs 1-Year High | -72.7% | -9.1% |
| Discount vs 2-Year High | -72.7% | -11.6% |
*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
Multi Asset Portfolios Offer More Upside With Less Risk
Single markets are unpredictable, but different assets react differently. A multi-asset portfolio cuts downside shocks while keeping upside on the table.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which 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