Analyzing Fiserv In Comparison To Competitors In Financial Services Industry

In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Fiserv FI against its key competitors in the Financial Services industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

Fiserv Background

Fiserv is a leading provider of core processing and complementary services, such as electronic funds transfer, payment processing, and loan processing, for us banks and credit unions, with a focus on small and midsize banks. Through the merger with First Data in 2019, Fiserv also provides payment processing services for merchants. About 10% of the company's revenue is generated internationally.

By thoroughly analyzing Fiserv, we can discern the following trends:

• At 28.66, the stock's Price to Earnings ratio is 0.76x less than the industry average, suggesting favorable growth potential.

• With a Price to Book ratio of 3.1, significantly falling below the industry average by 0.39x, it suggests undervaluation and the possibility of untapped growth prospects.

• The Price to Sales ratio of 4.77, which is 1.05x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a lower Return on Equity (ROE) of 2.51%, which is 5.2% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.96 Billion, which is 1.98x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $2.88 Billion, which indicates 2.09x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 7.39% is significantly lower compared to the industry average of 13.38%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When assessing Fiserv against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• When considering the debt-to-equity ratio, Fiserv exhibits a stronger financial position compared to its top 4 peers.

• This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.85, which can be perceived as a positive aspect by investors.

Key Takeaways

For Fiserv, the PE and PB ratios suggest the stock is undervalued compared to peers, indicating potential for growth. However, the high PS ratio implies overvaluation based on revenue, which may warrant caution. In terms of ROE, EBITDA, and gross profit, Fiserv shows strong performance relative to industry peers, indicating efficient operations and profitability. The low revenue growth rate may be a concern for future prospects compared to competitors.

This article was generated by Benzinga's automated content engine and reviewed by an editor.