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Fiserv (FISV) Rides on Solid Portfolio, Expanding Clientele

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On Mar 22, we issued an updated research report on Fiserv Inc. .

The company holds a dominant position in the financial and payment solutions business. The company is benefiting from its expanding product portfolio, which is leading to a steady flow of customers.

Notably, the company beat the Zacks Consensus Estimate in two of the trailing four quarters, delivering an average positive surprise of 0.82%.

In the past 30 days, the Zacks Consensus Estimate for the first quarter increased by a penny to 74 cents.

 

Growing Adoption Backs Growth

Fiserv is benefiting from growth in electronic bill payment, online banking and mobile payments markets. Rising investment by financial institutions to cater to the growing technological demands of customers is a tailwind.

Notably, Fiserv is witnessing an increase in the adoption of DNA as well as other digital banking solutions due to its improved architecture, flexible user interface and other digital capacities. The total number of signed clients for DNA platform grew more than 30% in 2017.

The company’s Architect and Mobiliti ASP solutions are also gaining traction. The company witnessed more than 20% growth in debit transaction growth from Zelle and P2P transactions in 2017.

Investment in digital-oriented technologies is improving its competitiveness. The acquisitions of Monitise, PCLender and Dovetail Group are expected to further enhance its clientele in the United States as well as in the international markets.

Fiserv’s cost-reduction initiative is also yielding good results. The company is expected to achieve savings of $250 million from its new five-year operational effectiveness program by 2020.

However, intensifying competition from the likes of Fidelity National Information Services Inc. (FIS - Free Report) remains concerns. Given the attractive prospects in the financial services market, there are always new entrants who seek to leverage on shifts in technology or product innovation to attract customers.

Zacks Rank and Other Stocks to Consider

Fiserv has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Some other top-ranked stocks in the business services sector are Mastercard Inc. (MA - Free Report) and Visa Inc. (V - Free Report) , both carrying a Zacks Rank #2.

Long-term earnings growth rate for Mastercard and Visa is projected to be 18.3% and 17.3%, respectively.

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