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Fiserv (FISV) Q4 Earnings: Is a Surprise in the Cards?
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Fiserv, Inc. ) is set to report fourth-quarter 2016 results on Feb. 8, after the closing bell. Last quarter, it posted a positive earnings surprise of 0.88%. In the trailing four quarters, the company has recorded an average positive earnings surprise of 1.20%.
However, we note that Fiserv has underperformed the Zacks Financial Transaction Service industry in the last one year. Fiserv shares have increased 16.25% compared with the industry’s gain of 29.72% during the period.
Factors to Consider
Fiserv commands a leading position in the financial and payment solutions business backed by a broad customer base and key contract wins. Additionally, the strong user base of Mobiliti ASP remains a major growth driver. In Dec 2016, Fiserv announced the buyout of Online Banking Solutions Corp, for an undisclosed sum, which is likely to improve its competitive position.
Fiserv also expects revenues from base solutions like DNA, Agiliti,and Now to drive growth as well as benefit from its new five-year cost cutting program.
However, the company’s sales are being negatively impacted due to lower termination fees, EMV deferral and adverse foreign currency translations. Plus, ongoing consolidation in the banking and financial services industry and intensifying competition from the likes of Equifax Inc. (EFX - Free Report) , Fidelity National Information Services, Inc. (FIS - Free Report) and Global Payments Inc. remain headwinds.
Our proven model does not conclusively show that Fiserv is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP for Fiserv is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at earnings of $1.16 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fiserv’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
A Stock to Consider
Here is a stock that, as per our model, has the right combination of elements to post an earnings beat this quarter:
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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Fiserv (FISV) Q4 Earnings: Is a Surprise in the Cards?
Fiserv, Inc. ) is set to report fourth-quarter 2016 results on Feb. 8, after the closing bell. Last quarter, it posted a positive earnings surprise of 0.88%. In the trailing four quarters, the company has recorded an average positive earnings surprise of 1.20%.
However, we note that Fiserv has underperformed the Zacks Financial Transaction Service industry in the last one year. Fiserv shares have increased 16.25% compared with the industry’s gain of 29.72% during the period.
Factors to Consider
Fiserv commands a leading position in the financial and payment solutions business backed by a broad customer base and key contract wins. Additionally, the strong user base of Mobiliti ASP remains a major growth driver. In Dec 2016, Fiserv announced the buyout of Online Banking Solutions Corp, for an undisclosed sum, which is likely to improve its competitive position.
Fiserv also expects revenues from base solutions like DNA, Agiliti,and Now to drive growth as well as benefit from its new five-year cost cutting program.
However, the company’s sales are being negatively impacted due to lower termination fees, EMV deferral and adverse foreign currency translations. Plus, ongoing consolidation in the banking and financial services industry and intensifying competition from the likes of Equifax Inc. (EFX - Free Report) , Fidelity National Information Services, Inc. (FIS - Free Report) and Global Payments Inc. remain headwinds.
Fiserv, Inc. Price and EPS Surprise
Fiserv, Inc. Price and EPS Surprise | Fiserv, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Fiserv is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP for Fiserv is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at earnings of $1.16 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fiserv’s Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
A Stock to Consider
Here is a stock that, as per our model, has the right combination of elements to post an earnings beat this quarter:
Twilio Inc. (TWLO - Free Report) with an Earnings ESP of +8.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>