A month has gone by since the last earnings report for Fiserv, Inc. . Shares have added about 3.9% 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 drivers.
Fiserv Q1 Earnings & Revenues Beat Estimates
Fiserv's first-quarter 2017 adjusted earnings from continuing operations of $1.25 per share beat the Zacks Consensus Estimate of $1.18 and improved 17.9% from the year-ago quarter.
Total revenue increased approximately 4.7% year over year to $1.394 billion and also beat the Zacks Consensus Estimate of $1.393 billion. Adjusted revenues grew 5.3% year over year to $1.32 billion.
Segment-wise, Payments and Industry Products adjusted revenues increased 7.3% year over year to $720 million. Financial Institution Services revenues were up 3.5% year over year to $620 million.
Internal revenues rose 4% owing to growth in Payments (up 5%) and Financial (up 4%) segments.
Source-wise, total Processing and services revenues increased 5% on a year-over-year basis to $1.18 billion while Product revenues increased 3.3% year over year to $216 million.
Margins
Adjusted operating income increased 7.5% from $399 million in the year-ago quarter to $429 million. The company’s adjusted operating margin of 32.5% increased 60 basis points (bps) on a year-over-year basis.
Other Financial Details
As of Mar 31, 2017, Fiserv had cash and cash equivalents of $308 million, compared with $300 million as on Dec 31, 2016. Long-term debt at quarter-end was $4.55 billion.
Fiserv’s cash from operating activities for the quarter ended Mar 31, 2017 was $463 million, as against $509 million reported in the year-ago period. The company’s free cash flow increased to $366 million in the quarter from $298 million reported year over year.
Fiserv bought back 3.4 million shares for $389 million in the quarter.
Guidance
For 2017, Fiserv expects adjusted earnings per share in a range of $5.03–$5.17, representing growth rate of 14%–17% year over year.
Adjusted internal revenue growth is now expected to be 4%–5%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been six downward revisions for the current quarter compared to one upward.
VGM Scores
At this time, Fiserv's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Fiserv (FISV) Up 3.9% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Fiserv, Inc. . Shares have added about 3.9% 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 drivers.
Fiserv Q1 Earnings & Revenues Beat Estimates
Fiserv's first-quarter 2017 adjusted earnings from continuing operations of $1.25 per share beat the Zacks Consensus Estimate of $1.18 and improved 17.9% from the year-ago quarter.
Total revenue increased approximately 4.7% year over year to $1.394 billion and also beat the Zacks Consensus Estimate of $1.393 billion. Adjusted revenues grew 5.3% year over year to $1.32 billion.
Segment-wise, Payments and Industry Products adjusted revenues increased 7.3% year over year to $720 million. Financial Institution Services revenues were up 3.5% year over year to $620 million.
Internal revenues rose 4% owing to growth in Payments (up 5%) and Financial (up 4%) segments.
Source-wise, total Processing and services revenues increased 5% on a year-over-year basis to $1.18 billion while Product revenues increased 3.3% year over year to $216 million.
Margins
Adjusted operating income increased 7.5% from $399 million in the year-ago quarter to $429 million. The company’s adjusted operating margin of 32.5% increased 60 basis points (bps) on a year-over-year basis.
Other Financial Details
As of Mar 31, 2017, Fiserv had cash and cash equivalents of $308 million, compared with $300 million as on Dec 31, 2016. Long-term debt at quarter-end was $4.55 billion.
Fiserv’s cash from operating activities for the quarter ended Mar 31, 2017 was $463 million, as against $509 million reported in the year-ago period. The company’s free cash flow increased to $366 million in the quarter from $298 million reported year over year.
Fiserv bought back 3.4 million shares for $389 million in the quarter.
Guidance
For 2017, Fiserv expects adjusted earnings per share in a range of $5.03–$5.17, representing growth rate of 14%–17% year over year.
Adjusted internal revenue growth is now expected to be 4%–5%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been six downward revisions for the current quarter compared to one upward.
Fiserv, Inc. Price and Consensus
Fiserv, Inc. Price and Consensus | Fiserv, Inc. Quote
VGM Scores
At this time, Fiserv's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.