Fiserv Shares Surge to Record High Following Strong Earnings Report

On Wednesday, Fiserv, a prominent payments company, saw its shares climb over 7%, setting a new record after posting impressive fourth-quarter earnings that surpassed analysts' expectations.

The stock closed at $229.53, marking an increase from its previous peak in November. Over the past year, Fiserv's stock has risen approximately 60%. The company, which made its public debut in 1986, specializes in providing digital payment technologies tailored for small businesses and financial institutions.

In its latest quarterly report, Fiserv announced adjusted earnings of $2.51 per share, exceeding the anticipated average of $2.48 as per LSEG data. Additionally, the company's revenue grew by about 7%, reaching $5.25 billion compared to $4.92 billion during the same quarter last year, surpassing the consensus estimate of $4.96 billion.

The Clover segment, which encompasses payments hardware and software, achieved a remarkable 29% revenue increase compared to the previous year, bringing total revenue for the year to $2.7 billion for 2024. Clover aids businesses in streamlining their accounts receivable and payable processes.

CEO Frank Bisignano highlighted Clover's pivotal role in the company's growth during an interview on CNBC's "Money Movers." Bisignano noted that Fiserv benefits from strong relationships with 3,500 banks across the United States, presenting significant opportunities for deeper market integration and expanded product offerings. Fiserv also notably completed a $22 billion acquisition of payment processor First Data in 2019, blending operations that others struggled to integrate.

Bisignano remarked, "The strength of the company lies in the merging of First Data and Fiserv, a feat that others have attempted but failed to accomplish. This integration allows us to serve both small businesses and major corporations like McDonald's and Walmart, as well as nearly every bank in the nation." He was nominated by President Donald Trump to lead the Social Security Administration.

Looking ahead, Fiserv projects revenue growth between 10% and 12% for 2025, outperforming analysts' expectations of around 8%. The company anticipates adjusted earnings ranging from $10.10 to $10.30 for that year, which aligns closely with Wall Street's consensus of $10.21.

Post-earnings report, Mizuho reiterated its buy recommendation for Fiserv, citing the company's strong distribution network and exceptional performance of the Clover business. Mizuho also suggested that Fiserv and similar payment enterprises may benefit from potential tariffs imposed by the Trump administration, which could lead to increased transaction volumes in small businesses like restaurants.

However, analysts have cautioned about potential risks to Fiserv's growth, including a possible slowdown in acquiring new merchant customers in the U.S. and ongoing bank consolidation.

— Article contributed by a financial news source.

Earnings, Growth, Finance