QS Research · Michael Burry's Scion Capital analyst template · 2006
Fidelity National Information Services, Inc. (FIS)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $28.31 (close 2026-11-10)
Conclusion: WATCH
Conviction low · base case +393% · downside -27% · upside +138%
FIS is a post-deal, deleveraging story: TTM to 2026-09-30 revenue of $12.94B and guided FY2026 EBITDA midpoint of $4.56B (GAAP) against a $34.62B EV give 7.6x EV/EBITDA and 16.3x EV/EBIT, cheap versus SSNC 11.0x, GPN 11.7x and JKHY 14.0x, but the discount is leverage ($20.03B net debt, 4.4x EBITDA) and a 4.4% ROIC that only equals the 4.4% WACC. On the P/E basis, the base case at 20.7x, the peer median P/E (7 peers in the comps table), is $139.53/share (+392.9%), the downside at 7.73x (15% below today's operating P/E of 9.1x) is $20.66 (-27.0%) with the $0.03/share exposure stress, and the upside is $67.38 (+138.0%), a 5.11:1 reward/risk that is a re-rating/deleveraging case, not a compounding one. The 2026-11-04 guidance cut (adjusted EPS $5.82-$5.89 from $6.15-$6.24) and the 2026-10-20 prepaid divestiture are the dated catalysts; the maintained $2.15-$2.25B FCF target and the ~2.8x gross leverage buyback trigger are what would make the base case happen. With ROIC at WACC, quality 26/100 and no durable moat, this is a low-conviction watch, not a long: the mispricing may be forming but the rule is not met.
Key numbers
- Share price: $28.31
- Market cap: $14.59B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $12.94B
- EV / EBITDA (TTM): 7.6x
- P/E (TTM): 4.2x
- Price / book: 0.90x
- Earnings-quality flags (TTM): none flagged
- P/E, operating (tax-normalized) (TTM): 9.1x
- Revenue growth (latest fiscal year): +5.4%
- ROIC (TTM): 4.4%
- WACC: 4.4%
- Economic profit spread: +0.0 pts
The 15 boxes
- ✓ 1. Long-form business notes
Between the oldest annual report here (FY2020) and the latest (FY2025), FIS cut itself down from four segments including a $3,767M merchant business to two software segments: Banking ($7,285M of $10,677M FY2025 revenue) and Capital Markets ($3,196M). Total revenue fell 26% from FY2020's $12,552M to FY2021's $9,338M as Worldpay moved to discontinued operations, yet operating income went the other way, from $552.0M (FY2020) to $1,042M (FY2021), $1,738M (FY2025) and $2,118M TTM to 2026-09-30 on $12.94B of TTM revenue. The model is multi-year recurring processing contracts, low capex ($154M FY2025) against heavy intangible amortization ($609M FY2025); TTM net income of $3.46B is not usable as an operating measure because it exceeds TTM pre-tax income of $1.43B.
- ✓ 2. Competitive advantage
FIS's numbers describe a scale-and-cost advantage rather than a pricing-power one: operating margin went from 4.4% in FY2020 to 16.3% in FY2025 and 16.4% on the TTM to 2026-09-30 even though revenue fell 26% from FY2020 to FY2021, and gross margin has sat in a 33.5%-37.5% band every year from FY2020 to FY2025. The 10-K itself calls the markets 'intensely competitive' and names in-house development, global banks, global internet companies (especially in payments), start-ups and unbundling of legacy bank solutions as the threats, and it flags renewal-time price pressure from large clients. Capital intensity is low (capex $154M, 1.4% of revenue in FY2025), but $609M of FY2025 amortization of intangibles and ~$7.7B of new debt taken on 2026-01-09 for the Issuer Solutions Acquisition mean part of the earnings base is bought and now carries more leverage than lower-debt rivals.
- ✓ 3. 10-Q takeaways
Q3 2026 (three months ended 2026-09-30) revenue rose 27% to $3,454M and nine-month revenue rose 29% to $10,126M, but essentially all of that is the Issuer Solutions Business acquired 2026-01-09 — pro forma revenue grew only 3.7% with recurring revenue +2.5%. Operating margin was 19% on the quarter (17% prior year) and adjusted EBITDA margin 42.9% (+111 bps), while GAAP gross margin slipped to 37% from 38% on purchase-amortization dilution. Free cash flow was $862M (+8.0%), debt $20.8B after $7.7B of acquisition borrowing, and buybacks are curtailed until gross leverage reaches ~2.8x. FY2026 guidance stays numeric: revenue $13,445-13,505M and adjusted EPS $5.82-5.89.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.