Fidelity National Information Services shares fell by -2.6% during the day's afternoon session, and are now trading at a price of $66.45. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
Fidelity National Information Services's Valuation Is in Line With Its Sector Averages:
Fidelity National Information Services, Inc. engages in the provision of financial services technology solutions for financial institutions, businesses, and developers worldwide. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 27.31 and an average price to book (P/B) ratio of 1.94. In contrast, Fidelity National Information Services has a trailing 12 month P/E ratio of 265.8 and a P/B ratio of 2.45.
Fidelity National Information Services has moved -17.8% over the last year compared to 17.3% for the S&P 500 — a difference of -35.1%. Fidelity National Information Services has a 52 week high of $91.98 and a 52 week low of $66.23.
The Company's Revenues Are Declining:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $10,333 | $12,552 | $9,339 | $9,720 | $9,831 | $10,127 |
| Gross Margins | 36% | 33% | 36% | 36% | 37% | 38% |
| Net Margins | 3% | 1% | 4% | -172% | -68% | 14% |
| Net Income (M) | $303 | $158 | $417 | -$16,752 | -$6,655 | $1,450 |
| Net Interest Expense (M) | $389 | $339 | $214 | $298 | $713 | $396 |
| Depreciation & Amort. (M) | $2,444 | $3,714 | $4,015 | $1,878 | $1,744 | $1,737 |
| Diluted Shares (M) | 451 | 627 | 621 | 593 | 591 | 540 |
| Earnings Per Share | $0.66 | $0.25 | $0.67 | -$27.74 | -$11.26 | $2.61 |
| EPS Growth | n/a | -62.12% | 168.0% | -4240.3% | 59.41% | 123.18% |
| Avg. Price | $114.8 | $131.55 | $126.75 | $98.04 | $60.07 | $66.75 |
| P/E Ratio | 171.34 | 505.96 | 186.4 | -3.53 | -5.33 | 25.48 |
| Free Cash Flow (M) | $2,210 | $4,179 | $4,490 | $3,712 | $4,220 | $2,078 |
| CAPEX (M) | $200 | $263 | $320 | $227 | $115 | $97 |
| EV / EBITDA | 20.62 | 26.02 | 21.04 | 28.72 | 19.13 | 16.83 |
| Total Debt (M) | $34,458 | $31,902 | $29,650 | $28,413 | $25,940 | $20,340 |
| Net Debt / EBITDA | 9.76 | 7.02 | 5.47 | 9.15 | 7.99 | 5.66 |
| Current Ratio | 0.84 | 0.8 | 0.74 | 0.79 | 0.75 | 0.85 |
Fidelity National Information Services's financial statements include several red flags such as declining revenues and decreasing reinvestment in the business, positive cash flows, and not enough current assets to cover current liabilities because its current ratio is 0.85. Additionally, the firm has a highly leveraged balance sheet. On the other hand, the company benefits from wider gross margins than its peer group and a strong EPS growth trend.
