Fiserv Inc (NASDAQ: FI) is under pressure this morning after the financial technology company reported disappointing financials for its third quarter and trimmed its guidance for the full year.
Adjusted earnings per share (EPS) tanked by 11% year-on-year as organic revenue growth slowed to a modest 1.0% only – triggering a nearly 30% intraday decline in FI shares.
But beneath the headline miss, Fiserv’s earnings release disclosed strategic moves and operational resilience that could make this sell-off a compelling entry point for long-term investors.
Fiser stock is now trading at a 5-year low.
Here’s what could help Fiserv stock reclaim its glory
To address operational sluggishness, the management unveiled “One Fiserv” action plan today – a strategic reset to streamline operations, enhance client service, and accelerate innovation.
The said initiative includes leadership changes and a renewed focus on high-growth platforms like Clover.
Fiserv chief executive Mike Lyons emphasised the pivot, saying “with the action announced today, we’ll be better positioned to drive sustainable, high-quality growth and reach our full potential.”
This signals a proactive stance, which could reignite investor confidence, making the post-earnings weakness an opportunity to load up on FI stock at a steep discount.
FI shares to benefit from focus on long-term growth
Fiserv shares appear attractive at current levels as the management’s recent moves underscore its commitment to long-term value creation.
In August, the company expanded its revolving credit facility to $8 billion through the end of this decade.
September saw two acquisitions – CardFree Inc and Smith Consulting – boosting merchant and banking capabilities.
Meanwhile, a definitive agreement to acquire StoneCastle Cash adds deposit funding scale – with closing expected in the first quarter of 2026.
Most recently, FI opted for strategic expansion into Canada via TD Bank’s merchant processing business and a multi-year tech partnership centred on Clover as well. According to CEO Lyons:
“As the world’s largest fintech, Fiserv has the size, scale, and suite of innovative products, network and platforms to capitalise on the rapidly evolving finance and commerce landscape.”
Note that the firm’s recent team-up with Mastercard on stablecoin infrastructure further positions FI shares to benefit from crypto tailwinds.
Fiserv is now trading at a compelling valuation
Finally, put Fiserv’s strategic initiatives and its commitment to long-term growth with its attractive valuation, and the stock immediately starts to look compelling as a long-term holding.
At the time of writing, Fiserv stock is going for about 10 times forward earnings only – indicating much of the downside is baked in already.
Additionally, FI repurchased $750 million worth of its stock in Q3 – signalling insider confidence as well.
Despite near-term weakness, its free cash flow still remains sufficiently strong, margins remain robust, and earnings growth retains long-term potential.
In fact, they’ve delivered double-digit earnings growth for 40 years straight, which makes Fiserv a quintessential example of “permanent compounder” – Jenny Harrington of Gilman Hill Asset Management told CNBC in a recent interview.
In conclusion, with the worst seemingly priced in, the post-earnings dip in FI shares may be less a red flag and more a green light for investors seeking quality at a discount.
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