Key insights
- The author argues Fiserv is undervalued, trading at ~6x PE with expected double-digit EPS growth by 2027. Fiserv's new AI OS for banking strengthens its market position. Projected $12 EPS by 2029, driven by margin expansion and revenue growth, suggests ~14% annual EPS growth. This makes Fiserv a potentially cheap AI play, warranting consideration for investors.
Fiserv is current trading at ~6x PE. Per last earnings call they’re expected to return to mid single digit organic growth and double digit EPS growth by 2027.
“Together, these actions will support the mid-single-digit adjusted revenue and double-digit EPS growth that we've discussed since last fall.” CEO
So baseline we have a double digit eps growth company in 1 year trading at 6x.
Today they announced an OS system tailored for Agentic AI in banking further solidifying their sticky MOAT and continuing to be mission critical financial infrastructure and the pipeline for many things banking.
This is currently in my eyes the cheapest AI play in the stock market.
Fresh off the press. They expect to hit $12 a share in 2029. They expect operating margins to increase past 37%. They expect revenues to expand from 4% to 6% a year between 2027-2029.
That is roughly 14% eps growth a year!!!! For 3 years!!!
Thoughts?