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On Monday, William Blair reiterated its Outperform rating on shares of Fiserv (NYSE:FI) (NYSE:FISV), a leading global provider of payments and financial services technology solutions. With a market capitalization of $92.4 billion and trailing twelve-month revenue of $20.7 billion, Fiserv stands as a prominent player in the financial services industry. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics. The firm’s analyst, Andrew Jeffrey, expressed confidence in the stock, advising investors to increase their positions. Highlighting Fiserv’s Clover as a top software-integrated point-of-sale (POS) system, Jeffrey emphasized the product’s success in the U.S. small and medium-sized business (SMB) processing market, which he described as large and fragmented.
Jeffrey pointed to Clover’s value-added services (VAS), which boast a 24% attachment rate, as evidence of its strong market proposition. He also noted that Fiserv’s extensive distribution network, which includes around 1,000 partner banks, is a significant advantage. The company’s strong market position is reflected in its impressive 61% gross profit margin and 6.56% revenue growth. InvestingPro subscribers have access to over 10 additional key insights about Fiserv’s financial health and growth potential. The analyst expects these partner banks to contribute to accelerated Clover volume growth in the second half of the year by promoting hardware sales and bundling Clover with Cash Flow Central.
Furthermore, Jeffrey mentioned a recent distribution deal with ADP, which has a current stock price of $319.37, as a positive development for Fiserv. He also highlighted Clover’s international expansion into four new markets and the diminishing impact of gateway conversion issues as factors that support his optimistic outlook for the company.
In addition to the strengths observed in the Clover segment, Jeffrey believes that Fiserv’s stock is trading at a premium due to its superior competitive position, diverse business mix, strategic capital allocation, and consistent financial performance, which includes an impressive record of 39 consecutive years of double-digit earnings per share (EPS) growth. Trading at a P/E ratio of 29.4x, the stock has demonstrated strong long-term performance. For a comprehensive analysis of Fiserv’s valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks. The endorsement from William Blair underscores the firm’s belief in the continued success and growth potential of Fiserv in the financial technology sector.
In other recent news, Fiserv has been the focus of several developments that are drawing attention from investors. The company held its annual shareholder meeting, where ten directors were elected, and executive compensation was approved. Additionally, Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2025. Meanwhile, Fiserv’s stock has been under scrutiny, with BTIG adjusting its price target to $215 from $240, maintaining a Buy rating, and Mizuho (NYSE:MFG) lowering its target to $200 from $220, while still recommending the stock as Outperform. Both firms cited concerns over the growth projections for Fiserv’s Clover payment system, which is expected to see an 8% growth in the second quarter, below prior expectations.
At a recent JPMorgan conference, Fiserv’s CFO acknowledged challenges affecting Clover’s growth, which contributed to a decline in the company’s stock. Despite this, Keefe, Bruyette & Woods maintained an Outperform rating and a $240 price target, reflecting confidence in Fiserv’s growth strategies and potential. The company’s leadership remains optimistic about Clover’s international expansion and new initiatives, such as Clover Hospitality and partnerships with firms like ADP. These developments are expected to bolster Fiserv’s revenue growth in the future. As Fiserv navigates these changes, investors and analysts continue to monitor the company’s performance closely.
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