Core Thesis - Fiserv, Inc. is viewed as a "fallen angel" at a strategic inflection point, with potential for long-term growth despite recent challenges and a significant share price decline [4][5]. Company Overview - Fiserv, Inc. provides essential banking infrastructure and payment solutions across the U.S., but has faced challenges due to an overemphasis on Payments, leading to a 39% decline in share price over the past year [2]. - As of December 1st, Fiserv's shares were trading at $62.69, with trailing and forward P/E ratios of 9.69 and 7.39 respectively [1]. Strategic Changes - Under the leadership of new CEO Mike Lyons, Fiserv is consolidating 16 core platforms into five strategic cores, aiming to simplify legacy infrastructure and enhance client experience [3]. - This re-architecture is intended to restore operational agility and long-term profitability, with the company maintaining a 12% return on equity (ROE) and expected earnings growth of around 10% annually, resulting in a PEG ratio of 0.7 [3]. Growth Initiatives - Strategic acquisitions, such as Smith Consulting and StoneCastle Cash Management, are enhancing Fiserv's capabilities in community banking and deposit management, supporting its ambitions in embedded finance [4]. - Fiserv's assets, including Clover and its partnership with ADP, serve over one million small and medium-sized business (SMB) clients, positioning the company for a return to growth [4]. Market Sentiment - Despite market pessimism and execution fatigue leading to a 69.02% depreciation in stock value since previous coverage, the current strategic initiatives and platform consolidation are seen as key drivers for a potential turnaround [5].
Fiserv, Inc. (FISV): A Bull Case Theory