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Here's Why Fiserv (FI) Stock is an Attractive Pick Right Now
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Fiserv (FI - Free Report) has had an impressive run on the bourses over the past three-month period, gaining 16.4% and outperforming its industry’s 10% growth.
Reasons Why FI is an Attractive Pick Now
Solid Rank: FI currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $2.15 per share, up 12.6% from the year-ago figure. The estimate for the full-year 2023 is pegged at $7.49 per share, which indicates growth of 15.4% from the year-ago reported figure. The estimates have been revised slightly upward in the past 60 days. The favorable estimate revision reflects the confidence of brokers in the stock.
Bullish Industry Rank: The industry to which Fiserv belongs currently has a Zacks Industry Rank of 83 (of 252 groups). Such a solid rank places the industry in the top 33% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
A mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Growth Factors: Fiserv's financial health and stability are important factors. The company is demonstrating a consistent upward trend in its Return on Assets (ROA), which serves as a measure of its profitability and financial efficiency. In the third quarter, the company achieved an ROA of 5.6%, surpassing the year-ago figure of 5.3%. This increasing ROA trend signifies the company's effectiveness in improving its earnings for every dollar invested over time.
Fiserv's current ratio at the end of third-quarter 2023 was pegged at 1.07, higher than the current ratio of 1.06 reported at the end of the year-ago quarter. An improving current ratio is desirable as it indicates that the company might not have problems meeting its short-term obligations.
Fiserv has maintained a steady pattern of share repurchases, acquiring 25.4 million, 23.3 million, and 16.1 million shares in 2022, 2021 and 2020, amounting to $2.50 billion, $2.57 billion and $1.64 billion, respectively. These strategic repurchase actions contribute to increased investor confidence and have a positive effect on earnings per share.
Other Stocks to Consider
The following stocks from the broader Business Services sector are worth consideration:
Gartner (IT - Free Report) : The Zacks Consensus Estimate of Gartner’s 2023 revenues indicates 7.9% growth from the year-ago figure, while earnings are expected to decline 1.9%. The company has beaten the consensus estimate in each of the four quarters, with an average surprise of 34.4%.
DocuSign (DOCU - Free Report) : The Zacks Consensus Estimate of DocuSign’s 2023 revenues indicates 9.2% growth from the year-ago figure, while earnings are expected to grow 41.4%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
DOCU presently sports a Zacks Rank of 1.
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow 10.1%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR currently holds a Zacks Rank of 2.
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Here's Why Fiserv (FI) Stock is an Attractive Pick Right Now
Fiserv (FI - Free Report) has had an impressive run on the bourses over the past three-month period, gaining 16.4% and outperforming its industry’s 10% growth.
Reasons Why FI is an Attractive Pick Now
Solid Rank: FI currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $2.15 per share, up 12.6% from the year-ago figure. The estimate for the full-year 2023 is pegged at $7.49 per share, which indicates growth of 15.4% from the year-ago reported figure. The estimates have been revised slightly upward in the past 60 days. The favorable estimate revision reflects the confidence of brokers in the stock.
Bullish Industry Rank: The industry to which Fiserv belongs currently has a Zacks Industry Rank of 83 (of 252 groups). Such a solid rank places the industry in the top 33% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
Fiserv, Inc. Price
Fiserv, Inc. price | Fiserv, Inc. Quote
A mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.
Growth Factors: Fiserv's financial health and stability are important factors. The company is demonstrating a consistent upward trend in its Return on Assets (ROA), which serves as a measure of its profitability and financial efficiency. In the third quarter, the company achieved an ROA of 5.6%, surpassing the year-ago figure of 5.3%. This increasing ROA trend signifies the company's effectiveness in improving its earnings for every dollar invested over time.
Fiserv's current ratio at the end of third-quarter 2023 was pegged at 1.07, higher than the current ratio of 1.06 reported at the end of the year-ago quarter. An improving current ratio is desirable as it indicates that the company might not have problems meeting its short-term obligations.
Fiserv has maintained a steady pattern of share repurchases, acquiring 25.4 million, 23.3 million, and 16.1 million shares in 2022, 2021 and 2020, amounting to $2.50 billion, $2.57 billion and $1.64 billion, respectively. These strategic repurchase actions contribute to increased investor confidence and have a positive effect on earnings per share.
Other Stocks to Consider
The following stocks from the broader Business Services sector are worth consideration:
Gartner (IT - Free Report) : The Zacks Consensus Estimate of Gartner’s 2023 revenues indicates 7.9% growth from the year-ago figure, while earnings are expected to decline 1.9%. The company has beaten the consensus estimate in each of the four quarters, with an average surprise of 34.4%.
IT currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DocuSign (DOCU - Free Report) : The Zacks Consensus Estimate of DocuSign’s 2023 revenues indicates 9.2% growth from the year-ago figure, while earnings are expected to grow 41.4%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
DOCU presently sports a Zacks Rank of 1.
Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate of Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure, while earnings are expected to grow 10.1%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.
BR currently holds a Zacks Rank of 2.