A month has gone by since the last earnings report for Fiserv, Inc. . Shares have added about 7.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fiserv Q4 Earnings In Line, Revenues Miss Estimates
Fiserv’s fourth-quarter 2016 adjusted earnings from continuing operations of $1.16 per share were in line with the Zacks Consensus Estimate but improved 16% from the year-ago quarter.
Total revenue increased approximately 4.6% year over year to $1.43 billion but missed the Zacks Consensus Estimate of $1.48 billion. Adjusted revenues grew 5% year over year to $1.35 billion.
Segment-wise, Payments and Industry Products adjusted revenues increased 9.3% year over year to $728 million. Financial Institution Services revenues were up 2.1% year over year to $644 million.
Internal revenues rose 4% owing to growth in Payments (up 6%) and Financial (up 2%) segments.
Source-wise, total Processing and services revenues increased 6.7% on a year-over-year basis to $1.18 billion while Product revenues contracted 4.3% year over year to $247 million.
Margins
Adjusted operating income increased to $435 million, up 10.4% from $394 million in the year-ago quarter. The company’s adjusted operating margin of 32.1% increased 140 basis points (bps) on a year-over-year basis.
Other Financial Details
As of Dec 31, 2016, Fiserv had cash and cash equivalents of $300 million compared with $275 million as on Dec 31, 2015. Long-term debt at quarter-end was $4.47 billion.
Fiserv’s cash from operating activities for full year ended Dec 31, 2016 was $1.43 billion, up 6.3% from the prior year. The company’s free cash flow increased 7.7% to $1.08 billion in the same period.
Fiserv bought back 2.6 million shares for $265 million in the quarter, taking the total count to 11.9 million shares worth $1.20 billion for the full year.
Guidance
For 2017, Fiserv now expects adjusted earnings per share in a range of $5.03 to $5.17, representing growth rate of 14% to 17% year over year.
Adjusted internal revenue growth is now expected to be 4% to 5%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Fiserv's stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Fiserv (FISV) Up 7.3% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Fiserv, Inc. . Shares have added about 7.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fiserv Q4 Earnings In Line, Revenues Miss Estimates
Fiserv’s fourth-quarter 2016 adjusted earnings from continuing operations of $1.16 per share were in line with the Zacks Consensus Estimate but improved 16% from the year-ago quarter.
Total revenue increased approximately 4.6% year over year to $1.43 billion but missed the Zacks Consensus Estimate of $1.48 billion. Adjusted revenues grew 5% year over year to $1.35 billion.
Segment-wise, Payments and Industry Products adjusted revenues increased 9.3% year over year to $728 million. Financial Institution Services revenues were up 2.1% year over year to $644 million.
Internal revenues rose 4% owing to growth in Payments (up 6%) and Financial (up 2%) segments.
Source-wise, total Processing and services revenues increased 6.7% on a year-over-year basis to $1.18 billion while Product revenues contracted 4.3% year over year to $247 million.
Margins
Adjusted operating income increased to $435 million, up 10.4% from $394 million in the year-ago quarter. The company’s adjusted operating margin of 32.1% increased 140 basis points (bps) on a year-over-year basis.
Other Financial Details
As of Dec 31, 2016, Fiserv had cash and cash equivalents of $300 million compared with $275 million as on Dec 31, 2015. Long-term debt at quarter-end was $4.47 billion.
Fiserv’s cash from operating activities for full year ended Dec 31, 2016 was $1.43 billion, up 6.3% from the prior year. The company’s free cash flow increased 7.7% to $1.08 billion in the same period.
Fiserv bought back 2.6 million shares for $265 million in the quarter, taking the total count to 11.9 million shares worth $1.20 billion for the full year.
Guidance
For 2017, Fiserv now expects adjusted earnings per share in a range of $5.03 to $5.17, representing growth rate of 14% to 17% year over year.
Adjusted internal revenue growth is now expected to be 4% to 5%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Fiserv's stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.