Fiserv

When looking at the presentation released by Fiserv, the global fintech operator, this week, what is immediately striking is the slew of big numbers and the vast array of font sizes used. There is a lot going on. The numbers, though, are big for a reason. Fintech means many things, to many people, but when it comes to Fiserv, they are very much ‘in it’. The number one global merchant acquirer, the number one provider of services in integrated banking, such as mobile and online. The number one provider of P2P and bill payments in digital and, yep, the number one global issuer processor in card payments. For anyone who has not done an MBA, many of these terms may feel a little bit too much like ‘business speak’, but the scale of Fiserv’s operations is massive. Hence the big orange numbers in the deck. This is a company, in their own words, that is moving money and information in a way that moves the world. Given the rapid digitisation of today’s world, that is a good business to be in. We’re talking here more than 12,000 financial transactions per second, and a reach that goes into pretty much every household in the US. It’s no wonder they have innovation partnerships with the likes of Amazon pay, Google cloud, IBM, Snowflake, Verizon and Palantir. In addition to giving the many growth initiatives a good airing, the management team provided some firm financial targets. This is what analysts like. Numbers. When the guidance was lined up next to previous forecasts, analysts quickly realised that they needed to push through some upgrades. As befitting of a business that provides the grease to the wheels of e-commerce, the medium-term outlook glistens, and delivers a bottom line that is forecast to grow faster than the S&P. Potentially much faster. And yet the stock currently trades at a discount to the very same S&P. Odd. Unlike the long-term potential of the business set out by a fully charged management team this week, something doesn’t quite add up. Perhaps the market, souped up over a post Covid rotation trade, has yet to see the opportunity. Or the deck.