TLDR
- Fiserv stock plunged 44% on Wednesday in the company’s worst trading day ever
- Full-year earnings guidance slashed to $8.50-$8.60 per share from $10.15-$10.30
- Q3 earnings of $2.04 per share missed estimates by $0.61
- Revenue of $5.26 billion fell short of $5.35 billion consensus
- Organic growth collapsed from 8% to just 1% quarter-over-quarter
Fiserv delivered a gut punch to investors on Wednesday. The fintech company’s stock collapsed 44% to $55.37, marking the worst single-day decline in company history.
The catalyst was brutal. Fiserv slashed its full-year adjusted earnings outlook to $8.50-$8.60 per share from a previous range of $10.15-$10.30.
That’s a nearly 20% reduction in guidance. Wall Street analysts had expected $10.15 per share for the full year.
The stock was headed for its lowest close since January 3, 2019. On that day, shares ended at $70.11.
Third Quarter Results Disappoint
The third quarter numbers told a grim story. Fiserv posted adjusted earnings of $2.04 per share, missing analyst expectations of $2.64 by a wide $0.61 margin.
Revenue came in at $5.26 billion for the quarter. While this represented slight growth, it still missed the $5.35 billion consensus estimate.
The growth slowdown was alarming. Organic growth crawled to just 1% in the quarter, a dramatic deceleration from the 8% rate posted three months earlier.
That kind of growth collapse doesn’t happen by accident. Something fundamental shifted in Fiserv’s business during the quarter.
Fiserv also announced leadership changes including a new CFO and co-presidents. The timing raised questions about internal challenges beyond just the numbers.
Analyst Reaction
Jefferies analysts led by Trevor Williams didn’t hold back. They called the magnitude of the miss and guidance cut “difficult to comprehend” in a Wednesday research note.
Their prediction of a 40%+ stock decline proved accurate. The market’s reaction was swift and merciless.
The stock had already been struggling. Shares were down 36.86% over the prior 12 months and 6.77% in the last three months.
Wall Street had been losing faith even before this report. Fiserv saw 21 negative earnings revisions against just one positive revision in the past 90 days.
By The Numbers
The earnings miss of $0.61 per share represents a substantial shortfall for a major fintech player. The revenue gap of approximately $90 million compounded investor concerns.
Fiserv’s previous July guidance now looks divorced from reality. The company had projected earnings as high as $10.30 per share compared to the new maximum of $8.60.
That’s a $1.70 per share difference at the high end. For investors who bought on the strength of that earlier forecast, Wednesday’s revision was devastating.
InvestingPro rates Fiserv’s financial health as “good performance,” though that assessment now faces scrutiny. The recent results suggest the rating may need updating.
The company reported revenue of $4.92 billion in some filings and $5.26 billion in others, likely reflecting different accounting treatments. Either way, the number missed expectations.
Fiserv’s stock had closed at $126.17 before Wednesday’s decline, meaning investors lost more than half their value in a single trading session.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
