Fiserv, Inc. (FISV)

Conclusion

Fiserv provides payments and financial services technology, including merchant acquiring, the Clover point-of-sale platform, and processing for banks, credit unions and other financial institutions. At 63.52 USD on 2026-11-09, the market capitalisation is 34.4 billion USD.

The verdict is undervalued. The fair value band runs from 99.74 to 149.62 USD, with a midpoint of 124.68 USD and a margin of safety of 96.3% at the current price. The discounted cash flow value is 107.25 USD per share, and the fair value from historical multiples is 142.11 USD. Price to free cash flow (10.9x against a ten-year median of 24.4x), price to sales (1.7x against 5.1x) and price to book (1.6x against 2.8x) all sit below their medians, while EV to EBITDA stands at 95.9x against 17.0x. The reverse DCF implies growth of 1.1%, against revenue growth of 7.4% over five years and free cash flow per share growth of 10.5%.

The strongest numbers are free cash flow after stock-based compensation of 2.76 billion USD, a five-year change in share count of -4.3%, and a Beneish M-score of -2.65. The weakest are an operating margin of -11.9%, a return on invested capital of -4.6% against a WACC of 7.4%, and net debt to EBITDA of 41.8x with an Altman Z-score of 1.01. If operating margin does not recover, the cash flow behind the fair value band is at risk.

Financial health

Grey: financial strength cannot be scored for Fiserv, because debt is part of a financial business's trade, so the usual health measures are shown without a colour. The current ratio is 1.04x and the quick ratio 0.19x. Net debt to EBITDA is 41.8x, debt to equity 1.29x, and interest coverage -1.9x, since operating income is negative on a trailing twelve-month basis. The Altman Z-score of 1.01 falls in the distress zone, although the model was designed for manufacturers, which Fiserv is not. Insolvency risk: the Ohlson model does not apply to a financial business.

Earnings quality

Green: five-year free cash flow conversion of 141.4%, low accruals of -3.3% and a shrinking share count hold this up, while a Piotroski score of 5 out of 9 is only neutral. Trailing twelve-month free cash flow conversion is not available. Stock-based compensation is 1.9% of revenue, and free cash flow after it is 2.76 billion USD. The share count fell at a compound rate of -4.3% over five years, which points to buybacks. The Beneish M-score of -2.65 reads as unlikely to indicate manipulation. Over the last eight quarters the company beat earnings estimates six times and missed twice, with an average surprise of -0.5%. Estimate revisions are negative: the current-year estimate moved -10.5% over 90 days, with seven downgrades and two upgrades in the last 30 days, and the next-year estimate moved -10.5%.

Profitability

Red: operating margin, net margin and return on invested capital all pull this down. Gross margin is 45.7% against a ten-year median of 48.9%. Operating margin is -11.9% against a median of 26.3%, and net margin is -18.9% against 15.7%. Return on invested capital is -4.6% against a WACC of 7.4%, giving a return minus WACC of -12.0%, which the analysis classes as destroying value. The five-year median return on invested capital is 7.7%. Return on equity is -18.7%. The 2025 DuPont split shows a net margin of 16.4%, an asset turnover of 0.26x and an equity multiplier of 3.11x. Leverage therefore magnifies the equity return, and the trailing figures no longer show the 2025 margin.

Growth

Green: the five-year EPS compound growth rate of 35.2% and the next-year EPS growth estimate of 10.1% hold this up. Revenue compound growth is 6.1% over three years, 7.4% over five and 15.0% over ten, and revenue rose in all ten comparable years. The three-year EPS growth rate is 17.5% and the ten-year rate 15.5%. Free cash flow per share grew at 17.4% over three years, 10.5% over five and 14.2% over ten. Revenue growth is rated neutral, while the rest of the growth profile is rated good.

Valuation

Green: the verdict is undervalued, with a margin of safety of 96.3%. Current EV to EBITDA of 95.9x compares with a ten-year median of 17.0x, a premium of 464.7%. Price to free cash flow of 10.9x compares with a median of 24.4x, a discount of 55.3%. Price to sales of 1.7x compares with 5.1x, a discount of 67.4%, and price to book of 1.6x with 2.8x, a discount of 41.1%. The ten-year median P/E is 30.0x, but a current P/E is not available because earnings are negative. The discounted cash flow value is 107.25 USD at a discount rate of 9.9%, with 10.1% growth in the first stage and 2.5% in the terminal stage. The reverse DCF implies growth of 1.1%, a gap of -6.3% against five-year revenue growth and -9.5% against free cash flow per share growth. The fair value is an estimate built on fixed assumptions, including a 5% equity risk premium and capped growth, not a price target. The company pays no dividend.

Risks

The main risk is that operating margin of -11.9% and return on invested capital of -4.6% below a WACC of 7.4% persist. The cash flow case then depends on a margin recovery that the trailing figures do not yet show. Net debt to EBITDA of 41.8x and an Altman Z-score of 1.01 would matter if lenders tighten terms, but no debt maturity schedule is available to test that. Negative estimate revisions could signal further pressure on earnings. The discounted cash flow value rests on a terminal share of 54.2%, so much of the value depends on long-run assumptions. Trailing free cash flow conversion, the current P/E and beta are not available. This analysis also lacks a debt maturity schedule and revenue by segment.