It has been about a month since the last earnings report for Fiserv (FI Quick QuoteFI - Free Report) . Shares have added about 7.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Fiserv due for a pullback? 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 drivers.

Fiserv Beat Q3 Earnings Estimates

Fiserv has reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the mark.

FI’s adjusted earnings per share (excluding $1.3 from non-recurring items) of $2.3 beat the consensus mark by 2.2% and gained 17.4% year over year. Adjusted revenues of $4.9 billion missed the consensus estimate by a slight margin but rose a tad on a year-over-year basis.

Fiserv's Quarterly Details

Processing and services’ revenues of $4.2 billion increased 5.7% on a year-over-year basis and missed our estimate of $4.3 billion. Revenues in the Product segment were $978 million, up 13.1% from the year-ago quarter’s actual and surpassing our expectation of $947.7 million.

Revenues from Merchant Acceptance were $2.5 billion, growing 9.3% year over year and meeting our estimated figure. The Financial Solutions segment reported revenues of $2.4 billion, a 4.9% increase from the year-ago quarter and meeting our estimate.

The operating margin for the Merchant acceptance segment was 37.7%, up 290 basis points (bps) on a year-over-year basis. The adjusted operating margin for the Financial Solutions segment was 47.4%, increasing 40 bps from the year-ago quarter.

Balance Sheet & Cash Flow of FI

Fiserv exited the third quarter of 2024 with cash and cash equivalents of $1.2 billion, flat with the third quarter of 2023. The long-term debt was $24.1 billion compared with $24.4 billion in the second quarter of 2024. FI generated $2.2 million in net cash from operating activities, whereas its free cash flow was $1.9 billion. Capital expenditure was $402 million. The company repurchased 7.6 million shares for $1.3 billion in the quarter.

Fiserv's 2024 Guidance

The company has updated its 2024 guidance for adjusted earnings per share to $8.73-$8.80 from $8.65-$8.80 mentioned at the end of the previous quarter. Fiserv updated its year-over-year earnings per share growth guidance to 16-17% from the 15-17% stated at the end of second-quarter 2024. FI updated its year-over-year organic revenue growth guidance from the 15-17% mentioned at the end of the previous quarter to 16-17%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

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. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Fiserv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.