Fiserv, Inc. EBITDA jumped on 54.2% and EBITDA Margin increased slightly on 1.9 pp from 33.5% to 35.4%
02/09/2021 • About Fiserv, Inc. (
$FISV) • By InTwits
Fiserv, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Fiserv, Inc. is a fast growth stock: 2020 revenue growth was 45.8%, 5 year revenue CAGR was 23.1% at 2020 ROIC 3.1%
- Fiserv, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $900m in 2020, $721m in 2019, $360m in 2018, $287m in 2017, $290m in 2016
- The company has potentially unprofitable business model: ROIC is 3.1%
- It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 45.8%. Revenue growth showed slowdown in 20Q4 - it was -5.3% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.9 pp from 33.5% to 35.4% in 2020.
Gross Margin showed almost no change in 2020. During 2016-2020 Gross Margin topped in 2019 at 47.9%. SG&A as a % of Revenue increased on 5.8 pp from 32.2% to 38.1% in 2020. SG&A as a % of Revenue stuck to a growing trend at 4.8 pp per annum in the last 5 years.
Net Income margin decreased on 2.3 pp from 8.8% to 6.5% in 2020. During 2016-2020 Net Income margin topped in 2017 at 21.9% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Fiserv, Inc.'s CAPEX/Revenue was 6.1% in 2020. The company's CAPEX/Revenue increased slightly on 1.0 pp from 5.0% in 2017 to 6.1% in 2020. Average CAPEX/Revenue for the last three years was 6.4%.
Return on investment
The company operates at low ROIC (3.1%) and ROE (2.9%). ROIC decreased slightly on 1.5 pp from 4.6% to 3.1% in 2020. ROE decreased on 2.1 pp from 5.1% to 2.9% in 2020. During the last 5 years ROIC topped in 2018 at 20.4% and was declining since that time. During the last 5 years ROE topped in 2017 at 47.3% and was declining since that time.
Leverage (Debt)
Debt level is 3.9x Net Debt / EBITDA and 4.0x Debt / EBITDA. Net Debt / EBITDA dropped on 2.5x from 6.4x to 3.9x in 2020. Debt decreased on 6.0% while cash increased slightly on 1.5%. During 2016-2020 Net Debt/EBITDA topped in 2019 at 6.4x.
Fiserv, Inc. has no short term refinancing risk: cash is higher than short term debt (178.0%).
Valuation and dividends
The company's trades at EV/EBITDA 17.9x and P/E 77.1x.
Management team
The company's CEO Frank J Bisignano has spent 8 months with the company. Robert W Hau "Bob" is a the company's CFO. Robert W Hau "Bob" has spent 5 years at the company.
Financial and operational results
FY ended 12/31/2020
Fiserv, Inc. ($FISV) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 5,505 | 5,696 | 5,823 | 10,187 | 14,852 | 45.8% |
| Gross Profit | 2,546 | 2,672 | 2,754 | 4,878 | 7,040 | 44.3% |
| SG&A | 1,101 | 1,150 | 1,228 | 3,284 | 5,652 | 72.1% |
| EBITDA | 1,856 | 1,965 | 2,309 | 3,411 | 5,260 | 54.2% |
| EBIT | 1,445 | 1,532 | 1,753 | | | |
| Interest expence | 163 | 176 | 193 | | | |
| Tax | 492 | 158 | 378 | | | |
| Net Income | 930 | 1,246 | 1,187 | 893 | 958 | 7.3% |
| Stock Based Compensation | 68 | 63 | 73 | | | |
Balance Sheet
|
|---|
| Cash | 300 | 325 | 415 | 893 | 906 | 1.5% |
| Accounts Receivable | 902 | 997 | 1,049 | | | |
| Short Term Debt | 95 | 3 | 4 | 427 | 509 | 19.2% |
| Long Term Debt | 4,467 | 4,897 | 5,955 | 22,215 | 20,771 | -6.5% |
Cash flow
|
|---|
| Capex | 290 | 287 | 360 | 721 | 900 | 24.8% |
| Acquisitions | 265 | 384 | 712 | | | |
Ratios
|
|---|
| Revenue growth | 4.8% | 3.5% | 2.2% | 74.9% | 45.8% | |
| EBITDA growth | 7.4% | 5.9% | 17.5% | 47.7% | 54.2% | |
|
|---|
| Gross Margin | 46.2% | 46.9% | 47.3% | 47.9% | 47.4% | -0.5% |
| EBITDA Margin | 33.7% | 34.5% | 39.7% | 33.5% | 35.4% | 1.9% |
| EBIT Margin | 26.2% | 26.9% | 30.1% | | |
| SG&A, % of revenue | 20.0% | 20.2% | 21.1% | 32.2% | 38.1% | 5.8% |
| SBC, % of revenue | 1.2% | 1.1% | 1.3% | | |
| Net Income Margin | 16.9% | 21.9% | 20.4% | 8.8% | 6.5% | -2.3% |
| CAPEX, % of revenue | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% | -1.0% |
|
|---|
| ROIC | 18.6% | 19.1% | 20.4% | 4.6% | 3.1% | -1.5% |
| ROE | 35.8% | 47.3% | 47.3% | 5.1% | 2.9% | -2.1% |
| Net Debt/EBITDA | 2.3x | 2.3x | 2.4x | 6.4x | 3.9x | -2.5x |
| Interest coverage ratio (ICR) | 8.9x | 8.7x | 9.1x | | |
| Interest expence / Average debt | 3.6% | 3.7% | 3.6% | | | |
People
|
|---|
| Insider ownership | 0.4% | 0.4% | 0.4% | | | |
| Employees | 23,000 | 24,000 | 24,000 | | | |
| Revenue/Employee, th. $ | 239 | 237 | 243 | | | |
Fiserv, Inc. ($FISV) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3,769 | 3,465 | 3,786 | 3,832 | | 150.9% | 129.2% | 21.0% | -5.3% |
| EBITDA | 1,461 | 982 | 1,389 | 1,305 | | 168.6% | 77.6% | 37.7% | -1.1% |
| Net Income | 392 | 2 | 264 | 300 | | 74.2% | -99.1% | 33.3% | 21.5% |
Balance Sheet
|
|---|
| Cash | 896 | 869 | 937 | 906 | | 98.2% | -89.7% | -8.9% | 1.5% |
| Short Term Debt | 338 | 359 | 365 | 509 | | 297.6% | 332.5% | -27.9% | 19.2% |
| Long Term Debt | 21,630 | 21,515 | 20,894 | 20,771 | | 250.5% | 52.9% | -8.0% | -6.5% |
Ratios
|
|---|
| Gross Margin | 42.5% | 44.6% | 50.7% | 51.5% | | -4.4% | -3.5% | 2.4% | 3.7% |
| EBITDA Margin | 38.8% | 28.3% | 36.7% | 34.1% | | 2.5% | -8.2% | 4.4% | 1.4% |
| Net Income Margin | 10.4% | 0.1% | 7.0% | 7.8% | | -4.6% | -14.7% | 0.6% | 1.7% |
Peers in Data Processing & Outsourced Services
Below you can find Fiserv, Inc. benchmarking vs. other companies in Data Processing & Outsourced Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| Fidelity National Information Services, Inc. ($FIS) | - | -1.8% | -2.8% | 22.7% | 21.5% |
| |
|---|
| Median (39 companies) | 6.7% | 11.8% | 7.5% | 8.9% | -3.3% |
|---|
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.2% | 38.9% | 40.9% | 40.3% | 36.5% |
|---|
| Fiserv, Inc. ($FISV) | 46.2% | 46.9% | 47.3% | 47.9% | 47.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.2% | 20.6% | 19.2% | 21.7% | 18.2% |
|---|
| Fiserv, Inc. ($FISV) | 33.7% | 34.5% | 39.7% | 33.5% | 35.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Global Payments Inc. ($GPN) | 3.2% | 4.6% | 6.3% | 6.3% | 5.9% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.0% | 3.0% | 3.0% |
|---|
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.1% | 10.6% | 10.2% | 8.3% | 6.4% |
|---|
| Fiserv, Inc. ($FISV) | 18.6% | 19.1% | 20.4% | 4.6% | 3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
| |
|---|
| Median (35 companies) | 1.3x | 2.3x | 2.0x | 2.1x | 1.9x |
|---|
| Fiserv, Inc. ($FISV) | 2.3x | 2.3x | 2.4x | 6.4x | 3.9x |
