Overlooked and Undervalued: Why Fiserv Deserves Attention

Payment processing elephantine Fiserv (NASDAQ: FISV) continues to disappoint investors, and aft falling for astir of 2025, it mislaid astir fractional of its worth successful 1 time past October. It has remained down since past and has go ridiculously cheap, trading astatine a P/E ratio of lone 10.

Let's cheque retired what's happening astatine Fiserv and wherefore it mightiness merit capitalist attraction astatine this price.

Where to put $1,000 close now? Our expert squad conscionable revealed what they judge are the 10 champion stocks to bargain close now, erstwhile you articulation Stock Advisor. See the stocks »

Fiserv is 1 of the largest outgo processing companies successful the world. It provides the back-end infrastructure for galore banks and different fiscal institutions, taking a behind-the-scenes attack to bigger names you cognize and prosecute with.

It has much than $21 cardinal successful trailing-12-month revenue, and it typically boasts steadfast growth. However, it has made a fewer missteps recently. Its third-quarter study came successful beneath expectations, and absorption chopped full-year guidance.

The misses were beauteous terrible -- net per stock (EPS) were $2.04, a afloat $0.60 little than Wall Street expectations, and income declined 1% to $4.92 billion, missing expectations of $5.36 billion.

Management is guiding for full-year EPS of $8.55 astatine the midpoint, down from erstwhile guidance of $10.15 to $10.30, and gross is forecasted to summation 3.5% to 4% alternatively of the anterior guidance of 10%.

On apical of that, it's besides dealing with a suit from shareholders who accidental the institution made misleading claims astir Clover, a outgo level it acquired and is expanding. They allege that Fiserv inflated comparable income maturation by switching clients from different platforms.

These are superior problems, and compounded, it's not astonishing that Fiserv banal has plummeted. However, these are near-term developments that whitethorn extremity up being short-term. Fiserv is the person successful its industry, and it has a robust software-as-a-service (SaaS) exemplary that relies heavy connected recurring revenue. It serves thousands of clients and works with millions of merchants, and it's besides highly profitable. That's wherefore this whitethorn beryllium an accidental alternatively of a worth trap.

CEO Mike Lyons, who lone precocious started connected the job, has created the One Fiserv Action Plan, which involves a semipermanent attack to lawsuit work and operational excellence. It's besides readying to instrumentality greater usage of artificial quality (AI) to amended its platform, and it conscionable announced an enhanced woody with automated workflow institution ServiceNow (NYSE: NOW) arsenic portion of the plan.