QS Research · Michael Burry's Scion Capital analyst template · 2006
FISERV INC (FISV)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -27% · upside +51%
The market is not missing the leverage or the margin compression, but it may be over-discounting the $6.45B non-cash goodwill impairment and the transition-year guidance cut: cash flow is real at $3.16B TTM free cash flow and a 9.4% FCF yield, and FY2026 adjusted EPS is guided to $7.20-$7.40. Using the section 13 revenue base of $21.19B and $28.45B net debt, downside at 2.5x EV/Sales is about $46/share (-27%) and upside at 3.72x is about $95/share (+51%), with the base at today's 2.92x EV/Sales and $62.88 (0%). The base case does not clear +30% and the downside is worse than -25%, so the rule yields watch rather than long. The setup needs either a lower entry price or clearer evidence that Merchant margins and organic revenue are inflecting.
Key numbers
- Share price: $62.88
- Market cap: $33.46B
- Latest financial period: FY Dec 2025 to Sep 30, 2026
- Revenue (FY Dec 2025): $21.19B
- Price / book: 1.59x
The 15 boxes
- ✓ 1. Long-form business notes
Fiserv is a payments and financial-technology processor that in FY2025 (10-K dated 2026-02-19) produced $21,193M of revenue, $5.8B of operating income and $6.1B of net cash from operations, with 80% of revenue from processing and services fees under multi-year contracts that "generally have high renewal rates." Between the FY2020 10-K (dated 2021-02-26) and the FY2025 10-K the reported structure changed from three segments (Acceptance, Fintech, Payments) to two (Merchant, Financial), revenue rose from $14.85B to $21.19B and operating income from $1.85B to $5.82B per the XBRL series, while amortization of intangibles stayed large ($2.30B in FY2025) and capex nearly doubled. The FY2025 story told by the filing is Clover-led small business, embedded finance and stablecoin (FIUSD) under a "One Fiserv" action plan, plus an international mix that has widened to 16% of revenue.
- ✓ 2. Competitive advantage
Fiserv looks like a scale and switching-cost story rather than a brand story: FY2025 revenue of $21.19B, 80% of it processing and services billed as account- and transaction-based fees under multi-year contracts, and segment operating margins of 45.3% (Financial) and 34.5% (Merchant) in FY2025. But the advantage is not widening on the evidence here: consolidated operating margin fell 120 bps to 27.5% in FY2025 and both segment margins fell (Merchant -250 bps, Financial -200 bps) as distribution-partner and data-processing costs rose. The 10-K describes a fragmented, highly competitive field of acquirers, processors, ISVs, ISOs, networks and in-house bank systems, with no market-share data given; the $37.7B goodwill balance survived the FY2025 test but eight reporting units holding $18.5B of it had less than 15% fair-value cushion.
- ✓ 3. 10-Q takeaways
Q3 2026 was a messy quarter on the surface and roughly flat underneath: GAAP revenue fell 1% to $5,196 million with organic revenue flat, but a $6.45 billion non-cash goodwill impairment recorded in the three months to September 30, 2026 turned GAAP operating margin to (105.7)% and GAAP EPS to $(11.17), against adjusted EPS of $1.75. Core profitability stepped down — adjusted operating margin 31.2% vs 37.0%, Merchant margin 28.7% vs 37.2% — on personnel and One Fiserv transformation costs. Cash generation fell (operating cash flow $3.09 billion vs $4.12 billion in the first nine months; free cash flow $2.04 billion vs $2.88 billion) while 2026 guidance was affirmed at organic revenue (1%) to 0% and adjusted EPS $7.20-$7.40, with $500 million of buybacks planned for Q4 2026.
- ✓ 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
Filled; members read this box.
- ○ 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.