Dj Fidelity National Information Services Inc. Stock Underperforms Thursday When Compared To Competitors

Fidelity National Information Services, Inc. FIS recently partnered with Oracle to enhance billing and payment solutions for the utility sector, including electricity, gas, water and other essential services. The companies are using FIS' BillerIQ on Oracle Cloud Infrastructure (OCI) to streamline digital bill delivery, reduce paper check usage and offer various payment options like ACH, debit, credit,Realtime Pay and e-wallets.

According to FIS, 75% of organizations still rely on paper checks for bill payments, despite the inefficiencies and higher costs associated with this method. This indicates tremendous scope for the company in the industry in the future.

The collaboration with Oracle aims to simplify bill management for utility customers, enhance efficiency and cut operational costs. This will likely help the company offer customers more flexible, secure payment options. FIS chose OCI for its advanced features, such as strong price performance, security and extensive global reach.

OCI’s high-performance, low-latency networks and flexible deployment options across public, dedicated and hybrid environments were key factors, as well as Oracle’s extensive experience and reliability in the utilities sector. These advantages will help FIS provide a secure, scalable and efficient billing solution for utility customers.

This partnership will benefit Fidelity National by expanding its reach in the utility sector, increasing adoption of its BillerIQ platform, and generating more revenues through digital billing and payment services. By addressing industry demands for digital transformation and reducing operational costs, FIS can attract more utility clients and retain them with a competitive and secure billing solution.

FIS’ Price Performance

Shares of Fidelity National have gained 64.9% in the past year, outperforming the 34.5% rise of the industry.

Zacks Rank & Key Picks

Fidelity currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Business Services space are Affirm Holdings, Inc. AFRM, Cantaloupe, Inc. CTLP and Repay Holdings Corporation RPAY, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Affirm’s current-year earnings indicates a 64.1% year-over-year improvement. AFRM beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 17.8%. The consensus estimate for current-year revenues is pegged at $3.1 billion, a 33.5% year-over-year growth.

The Zacks Consensus Estimate for Cantaloupe’s current-year earnings indicates a 113.3% year-over-year surge. CTLP beat earnings estimates in two of the trailing four quarters, met once and missed on the other occasion, with the average surprise being 20%. The consensus estimate for current-year revenues implies 15.9% year-over-year growth.

The consensus estimate for Repay Holdings’ current-year earnings indicates a 4.6% year-over-year increase. It beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 9.3%. The consensus estimate for RPAY’s current-year revenues is pegged at $316.7 million, implying 6.8% year-over-year growth.

Zacks Investment Research

With a market cap of $47.4 billion, Fidelity National Information Services, Inc. provides technology solutions for banking, payments, and capital markets worldwide. Based in Jacksonville, Florida, it serves financial institutions, businesses, and developers with various financial services technologies.

Shares of the banking and payment technologies company have significantly outperformed the broader market over the past 52 weeks. FIS has surged 69.3% over this time, while the broader S&P 500 Index ($SPX) has rallied 35.9%. In 2024, shares of FIS are up 47.7%, compared to SPX’s 25.8% gain on a YTD basis.

Focusing more closely, Fidelity National Information has also outpaced the Financial Select Sector SPDR Fund's 47.1% return over the past 52 weeks and a 32.7% YTD gain.

FIS shares recovered marginally on Nov. 4 after reporting strong Q3 results, with adjusted EPS up 48.9% year-over-year to $1.40, beating estimates. Revenue rose 3.2% to $2.6 billion, supported by growth in Banking Solutions and Capital Market Solutions through strong recurring revenue and new sales. The company also controlled expenses effectively, with SG&A expenses coming in below projections and a significant 60.5% decline in net interest expenses. Additionally, FIS raised its 2024 guidance, projecting revenue between $10.1 billion - $10.2 billion and adjusted EPS of $5.15 - $5.20, boosting investor confidence.

For the current fiscal year, ending in December, analysts expect FIS’ EPS to grow 53.7% year-over-year to $5.18. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters while missing on another occasion.

Among the 30 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buys,” two “Moderate Buys,” and 14 “Holds.”

On Nov. 5, Morgan Stanley raised its price target on FIS to $87, maintaining an “Equal-Weight” rating. The firm notes strong trends in Banking and Capital Markets, with earnings boosted by Worldpay, though rising operating expenses may pose challenges next year.

As of writing, FIS is trading below the mean price target of $94.08. The Street-high price target of $115, implies a potential upside of 29.6% from the current price levels.

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.