Fiserv (FISV) Hits 52-Week High On Good Financial Health

Shares of Fiserv, Inc. (NASDAQ:FISV) hit a 52-week high of $116.24 on Nov 19, before closing a tad lower at $116.04.

The company’s shares have charted a solid trajectory, appreciating 57.9% year to date, ahead of the industry’s growth of 40.8%. Notably, Fiserv has witnessed a 10.6% rise in share price since it posted third-quarter 2019 results.

Let’s find out what’s supporting the rally.

The First Data Acquisition

The recent acquisition of First Data (completed in Jul 29) is one of the biggest financial mergers in a decade, and helped Fiserv emerge as one of the world’s largest payments and financial technology providers.

With integration progressing well, First Data is making significant contributions to Fiserv’s top and bottom-line performance. It contributed $1.6 billion to revenues and $396 million to operating income in the third quarter of 2019.

This helped Fiserv to achieve robust internal revenue and free cash flow growth, and operating margin expansion in the quarter. Internal revenue growth was 6%, led by a 10% rise in the GBS merchant business. Adjusted operating margin improved 130 basis points (bps) to 29.8% and free cash flow was more than $800 million.

Fiserv, Inc. Revenue (TTM)

Raised Guidance

Fiserv’s strong financial performance in the third quarter of 2019 allowed it to raise its guidance for 2019. Adjusted earnings per share is currently expected in the range of $3.98 to $4.02 (indicating 16-17% year-over-year growth) compared with the prior guided range of $3.39-$3.52 (suggesting 10-14% year-over-year growth).

The company now expects internal revenue growth of 6% compared with the prior guided range of 4.5-5%. Adjusted operating margin is now anticipated to expand 100 bps compared with the prior guidance of 50 bps and free cash flow conversion is estimated around 115% compared with the prior guidance of 105%.

Zacks Rank & Other Stocks to Consider

Currently, Fiserv carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are Global Payments (NYSE:GPN) , Mastercard (NYSE:MA) and Cardtronics (NASDAQ:CATM) . While Global Payments sports a Zacks Rank #1 (Strong Buy), Mastercard and Cardtronics carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected EPS (three to five years) growth rates for Global Payments, Mastercard and Cardtronics are 17%, 15.9% and 4%, respectively.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>