We've been asking ourselves recently if the market has placed a fair valuation on Series. Let's dive into some of the fundamental values of this Large-Cap Real Estate company to determine if there might be an opportunity here for value-minded investors.
an Increase in Expected Earnings Improves Its Value Outlook but Its Shares Are Expensive:
Fiserv, Inc. provides payments and financial services technology solutions in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. 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, Series has a trailing 12 month P/E ratio of 20.2 and a P/B ratio of 2.61.
Series has moved -38.1% over the last year compared to 14.2% for the S&P 500 — a difference of -52.3%. Series has a 52 week high of $238.59 and a 52 week low of $119.92.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $10,187 | $14,852 | $16,226 | $17,737 | $19,093 | $20,456 |
| Operating Margins | 16% | 12% | 14% | 21% | 26% | 28% |
| Net Margins | 9% | 6% | 8% | 14% | 16% | 15% |
| Net Income (M) | $893 | $958 | $1,334 | $2,530 | $3,068 | $3,131 |
| Net Interest Expense (M) | -$473 | -$709 | -$693 | -$733 | -$976 | -$934 |
| Depreciation & Amort. (M) | $247 | $523 | $498 | $555 | $566 | $589 |
| Diluted Shares (M) | 523 | 683 | 672 | 648 | 616 | 582 |
| Earnings Per Share | $1.71 | $1.4 | $1.99 | $3.9 | $4.98 | $5.38 |
| EPS Growth | n/a | -18.13% | 42.14% | 95.98% | 27.69% | 8.03% |
| Free Cash Flow (M) | $2,074 | $3,247 | $2,874 | $3,139 | $3,774 | $5,062 |
| CAPEX (M) | $721 | $900 | $1,160 | $1,479 | $1,388 | $1,569 |
| Total Debt (M) | $21,899 | $20,684 | $21,237 | $21,418 | $23,118 | $24,840 |
| Net Debt / EBITDA | 11.32 | 8.33 | 7.32 | 4.78 | 3.93 | 3.65 |
| Current Ratio | 1.08 | 1.04 | 1.03 | 1.04 | 1.04 | 1.06 |
Series has rapidly growing revenues and increasing reinvestment in the business and strong operating margins with a positive growth rate. Additionally, the company's financial statements display exceptional EPS growth and generally positive cash flows. However, the firm has a highly leveraged balance sheet. Finally, we note that Series has just enough current assets to cover current liabilities, as shown by its current ratio of 1.06.
