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Fiserv, Inc.
FI-N
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Sep 26, 2025
Stock price when the opinion was issued
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Premium contentPremium contentOur PAST TOP PICK with FI has triggered its stop at $115. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 15%, when combined with our previous recommendations.
Is buying more. She bought this 12 years ago. Trimmed it last February at $230 when it was priced for perfection. It reported today and is down 16%, but is trading at a lower 12x PE. They reduced sales guidance to 10% but from 10-12% and affirmed earnings guidance at 15-17%. All their businesses have huge growth, and a 7% free cash flow yield overall. They delivered double-digit earnings growth for 40 straight years. A permanent compounder.
Got crushed this year because its Clover division delivered growth, but not enough to satisfy the market. That sometimes happens when a stock gets a bit ahead of itself. Very good moat. Cheap at less than 12x next year's earnings. Aggressive stock buybacks.
Inflation is sticky, which is great for a payment processor because they take a percentage of the value of each purchase. No dividend.
FI has proven to be highly resilient over the years. The company has delivered more than 35 consecutive years of double-digit EPS growth, demonstrating the longevity and predictability of its business model, even during tough economic environments. That said, FI’s share price has recently shown very weak momentum. Year-to-date, it is among the worst performers in the S&P 500 index, as the company missed Clover’s volume growth expectations. Investors are also concerned that competition and tariffs could continue to weigh on Clover’s volumes for some time. Time will tell—FI may eventually turn around, but it could take a while, and investors may face further near-term pain. Overall, we think the setup is attractive from a risk/reward, but we would like to see business volume improve. We would not be too concerned with the lawsuit (s). They are very common when a stock declines sharply. FI made an acquisition this week and ongoing business continues. We would sit this one our to the New Year to see how tax loss selling may go, but one to keep an eye on.
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