Back to top

Analyst Blog

Fiserv Inc (FISV - Analyst Report) recently signed a contract with Texas-based Randolph-Brooks Federal Credit Union (RBFCU) to implement the DNA account processing system. The RBFCU, which manages assets worth $5.5 billion, selected Fiserv’s DNA platform to upgrade its enterprise infrastructure to better serve more than 430K members.

Fiserv’s DNA account processing solution has gained significant momentum in recent times. The solution won 5 new contracts in the second quarter, making it a total of 10 in the first half of 2013. The DNA banking platform was the primary reason behind Fiserv’s acquisition of Open Solutions early this year.

DNA was Open Solutions’ flagship product and had more than 800 customers at the time of acquisition. The acquisition of the DNA platform is expected to expand Fiserv’s customer base, going forward. Most of the DNA contracts are long term in nature, which is significant. These will be a recurring revenue source for Fiserv, going forward.

Fiserv expects the synergies from the Open Solutions acquisition to exceed the original revenue and expense target of $75.0 million and $50.0 million, respectively. The acquisition is expected to be significantly accretive to earnings per share, going forward.  

Accretive acquisitions have been a key growth factor for Fiserv over the years. They have helped Fiserv expand its foothold in the financial and payment solutions business through its diversified product portfolio and continued technology upgrades. The company’s advanced products are likely to further enhance its revenue streams.

This is evident from the fact that the company signed 98 new clients, which helped it to expand its total number of clients for the Mobiliti solution to 1,600 at the end of the second quarter.

Client demand for the Popmoney solution continues to remain strong as Fiserv signed 64 new institutions in the quarter. During the quarter, Fiserv signed 71 electronic bill payment clients and 38 debit processing clients.

We believe that various contract wins and accretive acquisitions will help Fiserv to fight stiff competition from Fidelity (FIS - Analyst Report), Mastercard (MA - Analyst Report) and Global Payments (GPN - Snapshot Report) in the near term.

However, a volatile macroeconomic environment, banking and financial service consolidation, poor cash flow, higher amount of debt and increasing industry regulations are the primary near-term concerns.

Currently, Fiserv has a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 2.99 +2.75%
CHINA BIOLO… CBPO 46.80 +1.60%
CHIPOTLE ME… CMG 688.83 +1.54%
GILEAD SCIE… GILD 101.68 +0.88%
ILLUMINA IN… ILMN 174.20 +0.72%