Long-established in the Software industry, Fidelity National Information Services Inc (FIS, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 0.53%, juxtaposed with a three-month change of 6.68%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Fidelity National Information Services Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 6/10
- Growth rank: 1/10
- GF Value rank: 8/10
- Momentum rank: 5/10
Based on the above method, GuruFocus assigned Fidelity National Information Services Inc a GF Score of 67 out of 100, which signals poor future outperformance potential.
Understanding Fidelity National Information Services Inc Business
Fidelity National Information Services Inc, with a market cap of $35.68 billion and sales of $17.08 billion, has expanded its operations beyond its core processing and ancillary services to banks. The acquisitions of Sungard in 2015 and Worldpay in 2019 have diversified its offerings to include record-keeping for investment firms and payment processing services for merchants. With a significant presence in the United States and United Kingdom, approximately a quarter of its revenue is generated from international markets. The company's operating margin stands at 11.76%, reflecting its profitability in the competitive software industry.
Financial Strength Breakdown
Fidelity National Information Services Inc's financial strength indicators present some concerning insights about the company's balance sheet health. With an interest coverage ratio of 3.45, it ranks lower than 84.38% of companies in the Software industry, indicating potential difficulties in managing interest expenses. The company's Altman Z-Score of -1.13 falls below the distress threshold, suggesting a risk of financial distress. Moreover, a low cash-to-debt ratio of 0.03 highlights the challenge in managing existing debt levels.
Growth Prospects
The company's growth trajectory appears to be stunted, as indicated by its low Growth rank. This is further compounded by a predictability rank of one star out of five, which casts doubt on the consistency of Fidelity National Information Services Inc's revenue and earnings, adding to investor uncertainty.
Next Steps
Considering Fidelity National Information Services Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors seeking companies with stronger GF Scores can explore further using the GF Score Screen available to GuruFocus Premium members.
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.
