It has been about a month since the last earnings report for Fiserv . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fiserv due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fiserv Beats Q1 Earnings Estimates, Revenues Miss
Fiserv reported mixed first-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.17 beat the consensus mark by 3.5% and increased 18.2% year over year. Adjusted revenues of $3.56 billion missed the consensus estimate by 0.1%.
Internal revenue growth was 4% in the reported quarter, with 8% growth in the Acceptance segment and 2% growth in both the Fintech and Payments segments.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.39 billion, down 0.3% year over year. Adjusted revenues of $1.39 billion grew 4.6% year over year.
Revenues at the Payments and Network segment increased 1.4% year over year to $1.41 billion. Adjusted revenues of $1.41 billion grew 1.1% year over year.
Revenues at the Financial Technology segment increased 2.5% year over year to $736 million.
Revenues at Total processing and services segment decreased 0.7% year over year to $3.05 billion while product revenues grew 1% year over year to $701 million.
Operating Results
Adjusted operating income of $1.12 billion was up 15.3% from the year-ago quarter. Adjusted operating margin of 31.4% grew 360 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $387 million, up 36.7% year over year. Adjusted operating margin grew 650 bps year over year to 27.7%.
Adjusted operating income at the Payments and Network segment was $585 million, up 1.7% year over year. Adjusted operating margin improved 20 bps year over year to 41.4%.
Operating income at the Financial Technology segment totaled $246 million, up 20.6% year over year. Operating margin of 33.4% improved 510 bps.
Balance Sheet and Cash Flow
Fiserv exited first-quarter 2021 with cash and cash equivalents of $831 million compared with $906 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.3 billion at the end of the prior quarter.
The company generated $952 million of net cash from operating activities in the reported quarter. Free cash flow was $821 million. Capital expenditures were $234 million.
The company repurchased 5.2 million shares for $612 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. The company now expects internal revenue growth of 9% to 12% compared with the prior guidance of8% to 12%. Adjusted earnings per share are now anticipated in the range of $5.35 to $5.50 compared with the prior guidance of $5.30 and $5.50.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Fiserv has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Fiserv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Fiserv (FISV) Down 6.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Fiserv . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fiserv due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fiserv Beats Q1 Earnings Estimates, Revenues Miss
Fiserv reported mixed first-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.17 beat the consensus mark by 3.5% and increased 18.2% year over year. Adjusted revenues of $3.56 billion missed the consensus estimate by 0.1%.
Internal revenue growth was 4% in the reported quarter, with 8% growth in the Acceptance segment and 2% growth in both the Fintech and Payments segments.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.39 billion, down 0.3% year over year. Adjusted revenues of $1.39 billion grew 4.6% year over year.
Revenues at the Payments and Network segment increased 1.4% year over year to $1.41 billion. Adjusted revenues of $1.41 billion grew 1.1% year over year.
Revenues at the Financial Technology segment increased 2.5% year over year to $736 million.
Revenues at Total processing and services segment decreased 0.7% year over year to $3.05 billion while product revenues grew 1% year over year to $701 million.
Operating Results
Adjusted operating income of $1.12 billion was up 15.3% from the year-ago quarter. Adjusted operating margin of 31.4% grew 360 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $387 million, up 36.7% year over year. Adjusted operating margin grew 650 bps year over year to 27.7%.
Adjusted operating income at the Payments and Network segment was $585 million, up 1.7% year over year. Adjusted operating margin improved 20 bps year over year to 41.4%.
Operating income at the Financial Technology segment totaled $246 million, up 20.6% year over year. Operating margin of 33.4% improved 510 bps.
Balance Sheet and Cash Flow
Fiserv exited first-quarter 2021 with cash and cash equivalents of $831 million compared with $906 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.3 billion at the end of the prior quarter.
The company generated $952 million of net cash from operating activities in the reported quarter. Free cash flow was $821 million. Capital expenditures were $234 million.
The company repurchased 5.2 million shares for $612 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. The company now expects internal revenue growth of 9% to 12% compared with the prior guidance of8% to 12%. Adjusted earnings per share are now anticipated in the range of $5.35 to $5.50 compared with the prior guidance of $5.30 and $5.50.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Fiserv has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Fiserv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.