Fidelity National Information Services Inc (FIS, Financial), a prominent player in the software industry, has recently witnessed a notable uptick in its stock performance. Over the past week, the company's stock price has increased by 1.45%, and over the last three months, it has surged by an impressive 14.92%. Currently, the market capitalization stands at $42.37 billion with a stock price of $75.46. According to GuruFocus, the GF Value of FIS is $101.45, suggesting that the stock is modestly undervalued. This valuation presents a compelling case for potential investors looking for growth opportunities in the tech sector.
Overview of Fidelity National Information Services Inc
Fidelity National Information Services Inc, commonly known as FIS, operates within the software industry, providing essential processing and ancillary services to banks. The company's scope expanded significantly after acquiring SunGard in 2015 and Worldpay in 2019. Although FIS has sold off a majority interest in Worldpay, it retains a minority stake, continuing its influence in payment processing across the US and UK. This strategic positioning allows FIS to maintain a robust presence in its market segment.
Assessing FIS's Profitability
FIS holds a Profitability Rank of 6/10, which reflects its ability to sustain profitable operations relative to its peers. The company's Operating Margin is 14.53%, ranking better than 81.57% of 2,757 companies in the same industry. However, its Return on Equity (ROE) and Return on Assets (ROA) stand at -29.40% and -11.62% respectively, indicating areas needing improvement. The Return on Invested Capital (ROIC) at 3.25% is better than 53.37% of industry peers, showing FIS's effectiveness in turning capital into profits.
Growth Trajectory and Future Prospects
The Growth Rank for FIS is 4/10, reflecting some challenges in its growth metrics over the past few years. The 3-Year and 5-Year Revenue Growth Rates per Share are -6.00% and -9.40% respectively. Despite these declines, the company's 3-Year EPS without NRI Growth Rate is an impressive 36.80%, indicating significant earnings growth during this period. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 2.30%, suggesting a potential turnaround in revenue growth.
Significant Shareholders
Among the notable shareholders, Dodge & Cox leads with 37,620,210 shares, representing 6.35% of FIS's shares. Following them are Barrow, Hanley, Mewhinney & Strauss, and HOTCHKIS & WILEY, holding 1.9% and 1.42% of the shares respectively. These major holders underscore a strong institutional interest in FIS, bolstering its market standing.
Competitive Landscape
FIS operates in a competitive environment with key players like Gartner Inc (IT, Financial), Cognizant Technology Solutions Corp (CTSH, Financial), and CDW Corp (CDW, Financial), having market caps of $34.04 billion, $33.29 billion, and $29.94 billion respectively. These companies are closely matched in terms of market capitalization, highlighting the competitive intensity within the software and IT services industry.
Conclusion
Fidelity National Information Services Inc's recent stock performance, characterized by a 15% increase over the past three months, reflects its resilience and potential for growth despite some challenges in profitability and revenue growth. The company's strategic acquisitions and its positioning in the payment processing landscape continue to provide it with opportunities to enhance its market share. With its stock currently assessed as modestly undervalued, FIS presents a viable option for investors looking for exposure in the technology sector. The competitive landscape remains tight, but FIS's strategic moves and solid institutional backing suggest it is well-equipped to maintain its momentum.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
