Investment Thesis
FISV is a mature financial services business with stable but modest growth (3.6% revenue, flat net income YoY) and solid operating margins (18.3%). However, poor capital efficiency (2.2% ROE, 0.7% ROA), weak free cash flow conversion (2.8% FCF margin), and elevated leverage (1.06x debt-to-equity) with modest interest coverage (2.5x) limit upside potential and financial flexibility.
Strengths
- Solid operating margin at 18.3% demonstrates pricing power and operational efficiency
- Stable revenue base of $5.0B with consistent 3.6% YoY growth in mature market
- EPS growth of 17.8% YoY reflects disciplined capital allocation and share repurchase activity
Risks
- Critically low capital efficiency with ROE of only 2.2% and ROA of 0.7% despite $80.5B asset base indicates poor asset deployment
- Weak free cash flow margin of 2.8% and $141M annual FCF generation insufficient relative to $27.9B long-term debt burden
- Thin liquidity position (1.06x current and quick ratios) combined with 1.06x debt-to-equity and 2.5x interest coverage leaves limited financial flexibility for downturns or debt service spikes
Key Metrics to Watch
- Free cash flow generation and FCF margin trajectory - currently critically low at 2.8%
- Return on Equity and Return on Assets trends - currently well below acceptable levels
- Debt reduction rate relative to cash flow - leverage ratio must improve from current 1.06x
Financial Metrics
Revenue
5.0B
Net Income
571.0M
EPS (Diluted)
$1.07
Free Cash Flow
141.0M
Total Assets
80.5B
Cash
829.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
18.3%
Net Margin
11.4%
ROE
2.2%
ROA
0.7%
FCF Margin
2.8%
Balance Sheet & Liquidity
Current Ratio
1.06x
Quick Ratio
1.06x
Debt/Equity
1.06x
Debt/Assets
67.4%
Interest Coverage
2.54x
Long-term Debt
27.9B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T06:29:00.514142 |
Data as of: 2026-03-31 |
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