Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Fidelity National Information Services Inc. (FIS - Analyst Report) will provide its financial solutions to VW Credit Inc., the auto finance segment of Volkswagen Group of America, to improve its loan and leasing processing business in North America.

VW Credit will leverage Fidelity’s AutoSuite, Default Manager and Touchpoint solutions for efficiently running business processes in a cost-effective manner.  Moreover, Fidelity’s solutions will enable VW Credit to synchronize and integrate the loan lease receivables, customer service, collections and customer relationship management facility.

We believe that Fidelity’s new customer wins and customer retention success are the keys to the company’s future prospects. These agreements are likely to increase the company’s market share in future.

Fidelity provides banking and payment technology solutions and has a strong clientele of financial institutions globally. We believe that Fidelity’s commanding position in the financial services market, its increasing international exposure, recurring revenue model, diversified product portfolio, cost synergies from acquisitions and loyal and increasing customer base will drive growth.

This is evident from Fidelity’s results in the first nine months of fiscal 2012. During this period, revenue from the Financial Solutions segment was up 8.1% year over year, while the Payment Solutions segment recorded marginal revenue growth of 1%. As a result, total consolidated revenue increased 3.4%.

Separately, we believe that Fidelity is well positioned to benefit from increasing investments in emerging technologies such as mobile banking. Mobile banking is developing as an extension of online banking, as mobile usage continues to accelerate globally.

However, increasing consolidation in the banking sector, a challenging environment for the Payment Solutions business and an uncertain regulatory environment are the primary headwinds in our view.

We maintain our Neutral recommendation on a long-term basis (for the next 6 to 12 months), primarily due to a highly-leveraged balance sheet and intense competition from other major players such as Fiserv Inc. (FISV - Analyst Report).

Currently, Fidelity has a Zacks #2 Rank (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

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 Zacks.com. 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
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%