Fiserv, Inc. (FI): A Bull Case Theory

We came across a bullish thesis on Fiserv, Inc. on Valueinvestorsclub.com by Alpinist. In this article, we will summarize the bulls’ thesis on FI. Fiserv, Inc.'s share was trading at $132.75 as of September 16th. FI’s trailing and forward P/E were 22.20 and 11.20 respectively according to Yahoo Finance.

Fiserv (FI) is a global leader in financial technology, serving 10,000 financial institutions across more than 100 countries, including 3,000 U.S. banks using its core systems. It dominates key categories such as merchant acquiring, online banking, issuer processing, and account-to-account transfers, with 2025 marking its 40th consecutive year of double-digit EPS growth. The company’s Clover platform has become the focal point for investors, though the market’s intense focus on gross payment volume (GPV) has overshadowed the broader story.

Management stresses that while GPV growth is important, Clover’s long-term value stems from revenue growth through merchant signups, hardware sales, and higher-margin value-added services (VAS), not just volume for volume’s sake. Clover is positioned as a full operating system for small businesses, integrating payments, software, and cash management, and remains underpenetrated with less than 3% U.S. share, under 10% VAS penetration domestically, and virtually no international penetration.

Expansion into new verticals such as hospitality and healthcare, international markets like Brazil, Mexico, and Europe, and new partnerships with ADP and Homebase support Fiserv’s $3.5 billion 2025 revenue target, with $4.5 billion projected for 2026. Despite beating Q1 and Q2 earnings estimates, FI’s stock sold off sharply—down as much as 23%—as investors focused on slower Clover GPV growth. Management reiterated guidance and emphasized revenue and VAS momentum, while accelerating buybacks to 130% of free cash flow at historically low valuations, creating a potential 2.5x return if FCF growth continues. Risks include pending securities litigation over Payeezy-to-Clover migrations and the need for stronger 2H’25 growth to meet revenue targets.

Previously we covered a bullish thesis on Fiserv, Inc. (FI) by David in October 2024, which highlighted the company’s sticky core processing systems, diversified offerings, and value-enhancing First Data acquisition. The company’s stock price has depreciated approximately by 34.39% since our coverage. This is because the thesis did not play out as expected. The thesis still stands as FI retains strong fundamentals. Alpinist shares a similar view but emphasizes Clover’s revenue growth versus GPV focus.

Fiserv, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 94 hedge fund portfolios held FI at the end of the second quarter which was 72 in the previous quarter. While we acknowledge the potential of FI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.