The Wisconsin-based Fintech company, Fiserv, Inc. (NYSE: FI) facilitates financial services technology. The company operates through various segments such as Merchant Acceptance, Financial Technology, and Payments and Networks. The company has a market cap of $70B and the current Price-to-earnings ratio for its share price is 28.
The Growth is Struck
When the annual reports are put together, we see some interesting insights. The revenue of the firm is growing each year, but the growth is minimal. If we put out the unusual growth in two COVID years, the compound annual growth rate is just 9.29%. It is lower than the average industry growth rate of 13.9%.
What the the actual reason?
You might think that the company is saving cash, in the end, to pay dividends or pay off debt, but it needs to reconcile with the balance sheet. Fiserv doesn’t pay dividends, and it has a debt-to-equity ratio of 0.78. It states that the firm has more retained earnings than its long-term debt.
The cash flow statement is the answer to all the above doubts. For 2 years, it has been making heavy investments in capital expenditure. That may bring more significant revenue in the future. Therefore, we can expect a reasonable revenue growth in the future, which may surpass the industry level soon.
Technical Analysis and Prediction of the FI Stock Price
The FI stock price started rising in June this year after taking support from a level of $112. This bullish trend continued til the stock reached its high of $115 in the recent July. Since then, there has been a significant correction in the FI stock price as a downtrend is observed.
At the press time, the FI stock price is trading at the level of $114. The Bulls are trying to take the support level of $112, but this will only get them halfway along the finish line. To break the trendline, they have to break past the trend line and make a higher low above it in order to break it.
The best possible scenario would be to break the immidiate resistance level of $117 and sustain above it. The RSI, on the other hand, is way below the neutral territory of 50. It means that the bulls have enough space to attempt a breakout before the RSI reaches its overbought level of 70.
Conclusion
Fiserv, Inc. (NYSE: FI) is reporting a sluggish rate of growth in its revenue, as seen in the annual reports. However, the company is making plans to improve. The current FI stock price is in a downtrend, and to break it, the bulls will have to sustain above the current resistance level
Technical Levels
- Support Levels: $112 and $106
- Resistance Levels: $118 and $123
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks or related indexes comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/10/18/fi-stock-price-the-actual-reason-behind-the-slow-growth-in-sales/