FI - Strong Clover Growth Can Push Fiserv Higher

2024-06-06 11:53:21 ET

Summary

• Fiserv's shares have performed well, rising 32% in the past year, driven by strong free cash flow and growth in its Clover business.
• The company's financial solutions unit, though slower growing, continues to generate cash flow and showed organic revenue growth of 5%.
• Fiserv's merchant business has been led by Clover, which has seen impressive revenue growth of over 30% and is gaining wallet share.

Shares of Fiserv ( FI ) have been a strong performer over the past year, rising about 32%. Its legacy payment process business continues to generate strong free cash flow, enabling accretive share repurchases, while Clover, its growth business, continues to compete well against other fintech rivals. I last covered Fiserv in October , rating shares a buy, and since that recommendation, the stock is up about 28%, a bit ahead of the market’s 24% gain. Shares have even pushed past my $135 price target; this fact, alongside more recent financials, makes now an opportune time to revisit Fiserv. I remain bullish....

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