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QS Research · Michael Burry's Scion Capital analyst template · 2006

FISERV INC (FISV)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case +30% · downside -48% · upside +68%

Fiserv's TTM figures are depressed by one-off gains in operating earnings, and Q2 2026 showed genuine revenue and margin deterioration, so the cheap 9.8x P/E and 14.3% FCF yield reflect real problems, not just market overreaction. Using Section 13's TTM EBITDA base of $5.33B and net debt $28.37B, a 12.0x EV/EBITDA fair multiple (between current 10.5x and JKHY's 16.7x) gives equity of (12.0×5.33 - 28.37)=$35.6B, or $66.9/share, +29.5% from $51.68. The downside at 8.0x gives $26.8/share (-48%) and the upside at 14.0x gives $87.0/share (+68%). That asymmetry is attractive, but the -48% downside violates the long rule, so this is a watch, not a long; conviction is low because the cases diverge sharply.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Fiserv generates revenue mainly from account- and transaction-based fees under multi-year contracts: processing and services were 80% of FY2025 revenue ($21.2B total revenue; $5.8B operating income; $6.1B operating cash flow). The current structure is Merchant Solutions (small business Clover, enterprise Commerce Hub, processing) and Financial Solutions (digital payments, issuing, banking). Since FY2020, revenue grew from $14.9B to $21.2B, segments changed from Acceptance/Fintech/Payments to Merchant/Financial, and international revenue mix increased from 13% to 16%.

  2. ✓ 2. Competitive advantage

    The sources describe a fragmented, highly competitive market and do not identify a clear durable moat; Fiserv says it competes favorably on quality, security and innovation. Its financials show a large recurring processing base (80% of FY2025 revenue under multi-year contracts), a high Financial-segment operating margin (45.3% in FY2025) and consistent revenue growth FY2020-FY2025, but margins declined in FY2025 and the company expects competition to increase.

  3. ✓ 3. 10-Q takeaways

    In Q2 2026 (ended June 30, 2026), Fiserv total revenue fell 4% YoY to $5,292 million, with Merchant down 1% and Financial down 8%. Operating margin compressed sharply to 19.2% from 30.7% on lower high-margin data and license revenue, Argentina anticipation revenue declines, and higher personnel, One Fiserv transformation, and data processing costs. One-off gains ($154M debt extinguishment, $83M sale-leaseback) flatter net income, but operating earnings weakened. No formal guidance was provided in this MD&A excerpt.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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