Luis Inigo Bono @Luisvib: "📢 Fiserv: a historic drop..."

Spain

📢 Fiserv: a historic drop and what it really means Today I want to take a deeper look at what’s happening with $FISV (Fiserv Inc) after its -50% fall. Many are wondering whether this is just a temporary stumble or if the company has gone from being a 10% growth stock to a 4% one. The answer is more nuanced — and worth understanding properly. Fiserv hasn’t stopped being a solid, profitable, cash-generating company, but the market has decided to re-anchor its valuation. What used to be priced as a “10% payments growth” company is now being valued as a “moderate 4–5% growth” business. And while that sounds catastrophic, it isn’t as bad as it seems. There are two sides to this story. On one hand, there are clearly temporary factors: - Argentina, which inflated growth figures in 2024–2025 due to hyperinflation and then deflated after Milei’s reforms. That boost wasn’t structural. - Weak execution and too much focus on cost control — something the CEO himself acknowledged. There was underinvestment in Clover and in merchant services, which is now being addressed through the new “One Fiserv” plan. These are fixable mistakes. With some investment and focus, those issues could normalise within two to three quarters. But that’s not what the market punished. What it punished was the implicit admission that the 9–10% growth story wasn’t as real as it looked. When the new CEO comes in and says, “2025 will be 3.5–4% and we want to re-anchor expectations,” the message is clear: “Forget the structural 10%. Our base is lower, and from there we’ll rebuild.” That changes the thesis — but doesn’t destroy the business. If you look at Fiserv’s three segments — Merchant, Payments and Financial Solutions — growth was already diverging: Merchant +5%, Financial -3%. And that’s the structural point: the core regions (US and Canada) were already growing more slowly than the market expected. That slowdown can’t be fixed in a single quarter, but it’s not a permanent decline either. In my base case: - 2025 will come in around 3.5–4%, as guided. - 2026 could return to 5–6%, once the “One Fiserv” plan starts to deliver. - Getting back to 8–9% will require flawless execution, a Clover recovery and less competitive pressure. Possible, yes — but slower. The market, however, has reacted as if this were the end of growth altogether. The stock has dropped to $65 — levels not seen since 2018 — which makes little sense given today’s numbers. Back in 2018, EPS was around $2.5–3, and today we’re talking about projected EPS above $8 for 2025, with much higher margins. So even if growth has slowed, today’s company is far larger, more profitable and generates far more cash. At current prices, the market is valuing it as if it will grow at 0%, when the more reasonable expectation is sustained 4–6% growth. That difference is exactly where opportunities emerge. I’ve maintained my conviction in Fiserv and slightly increased my position to 5.8% of the portfolio. Not because I think it will bounce straight back to 10%, but because I believe the drop has been a massive overreaction that doesn’t reflect the company’s real fundamentals. The new CEO has set the bar very low — leaving plenty of room for positive surprises. Right now, the market is treating it like a stagnant business, when it continues to generate cash, buy back shares and operate a resilient business model. If, over the coming quarters, it proves it can grow again at 5–6%, a re-rating will be inevitable. Sometimes the market fails to distinguish between “slower growth” and “no future”. — I’m Luis Iñigo, an AI developer and investor with over five years of experience. My approach focuses on balancing returns, risk control, and a long-term vision. I share analysis and decisions with full transparency through my Popular Investor profile. These are my personal opinions and not investment advice. Capital is at risk. Past performance does not guarantee future results. $SPX500 $NSDQ100 $DJ30

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