Fidelity National Information Services (NYSE:FIS) Surpasses EPS Estimates

• Fidelity National Information Services (NYSE:FIS) reported an EPS of $1.40, beating the estimated $1.36 and showcasing a strong upward trend in earnings.
• Despite a slight revenue shortfall, FIS's revenue grew year-over-year, indicating a positive growth trajectory in the company's revenue stream.
• FIS's strategic moves, including the separation of Worldpay, align with its Future Forward strategy, aiming to streamline operations and focus on core business areas.

On February 11, 2025, Fidelity National Information Services (NYSE:FIS) reported earnings per share (EPS) of $1.40, surpassing the estimated $1.36. This performance highlights FIS's ability to exceed market expectations, as it also outperformed the Zacks Consensus Estimate of $1.35 per share. This marks a significant improvement from the $0.94 per share reported in the same quarter last year, showcasing a strong upward trend in earnings.

FIS's revenue for the quarter was approximately $2.6 billion, slightly below the estimated $2.63 billion. This represents a 1.27% shortfall from the Zacks Consensus Estimate. However, it is an increase from the $2.51 billion reported in the same quarter the previous year, indicating growth in the company's revenue stream. Despite the revenue miss, FIS's consistent ability to surpass EPS estimates over the past four quarters demonstrates its robust financial performance.

The company operates in the Financial Transaction Services industry and has made significant strides in executing its Future Forward strategy. In 2024, FIS completed the separation of Worldpay and sold a 55% stake in its Worldpay Merchant Solutions business to private equity funds managed by GTCR. This strategic move is part of FIS's efforts to streamline operations and focus on core business areas, as highlighted by CEO Stephanie Ferris.

FIS's financial metrics provide further insight into its market valuation. The company has a price-to-earnings (P/E) ratio of 44.20, indicating how the market values its earnings. Its price-to-sales ratio is 3.62, reflecting the market's valuation of its revenue. Additionally, the enterprise value to sales ratio is 3.69, offering a perspective on its overall valuation relative to sales. These figures suggest a strong market confidence in FIS's future growth prospects.

Despite a low debt-to-equity ratio of 0.10, indicating a relatively low level of debt compared to equity, FIS's current ratio of 0.85 may suggest potential liquidity concerns in meeting short-term obligations. However, the company's earnings yield of 2.26% and enterprise value to operating cash flow ratio of 10.31 provide a positive outlook on its earnings and cash flow relative to its enterprise value.

Fidelity National Information Services, Inc. (NYSE:FIS) shares are down around 24% since the company’s reported Q3 results on Thursday. Q3 EPS came in at $1.74, worse than the Street estimate of $1.76. Revenue was $3.6 billion, compared to the Street estimate of $3.61 billion.

The company is going through a transition that takes time. It is a structurally slower growing, lower profitability business vs. peers with more international exposure and thus hurt more by FX and inflation costs, making margin more vulnerable. According to the analyst at Oppenheimer, cost cuts are a temporary fix, and slower than market peer growth likely reignites market share loss conversations and investment needs, while banking growth slows.

For Q4/22, the company expects EPS to be in the range of $1.66-$1.72, compared to the Street estimate of $2.07, and revenue in the range of $3.656-3.706 billion, compared to the Street estimate of $3.81 billion.

RBC Capital analysts lowered their price target to $114 from $141 on Fidelity National Information Services, Inc. (NYSE:FIS) ahead of their upcoming meeting tomorrow with the company’s new CFO Erik Hoag.

Incorporating a more challenging backdrop in the UK (15% of revenues), strengthening Dollar, higher interest costs & D&A, and a new lower share price embedded in their buyback model, the analysts lowered their 2022/2023 estimates.

Based on the above assumptions, the analysts’ 2022/2023 revenue, adjusted EBITDA and adjusted EPS moved to $14.57 billion/$6.46 billion/$6.96 and $15.34 billion/$6.87 billion/$7.60 from $14.69 billion/$6.53 billion/$7.04 and $15.61 billion/$6.98 billion/$7.85, respectively. Their 2022 and 2023 adjusted EPS are now approximately 1.5% and 3.4% lower than the Street estimates.

RBC Capital analysts lowered their price target to $114 from $141 on Fidelity National Information Services, Inc. (NYSE:FIS) ahead of their upcoming meeting tomorrow with the company’s new CFO Erik Hoag.

Incorporating a more challenging backdrop in the UK (15% of revenues), strengthening Dollar, higher interest costs & D&A, and a new lower share price embedded in their buyback model, the analysts lowered their 2022/2023 estimates.

Based on the above assumptions, the analysts’ 2022/2023 revenue, adjusted EBITDA and adjusted EPS moved to $14.57 billion/$6.46 billion/$6.96 and $15.34 billion/$6.87 billion/$7.60 from $14.69 billion/$6.53 billion/$7.04 and $15.61 billion/$6.98 billion/$7.85, respectively. Their 2022 and 2023 adjusted EPS are now approximately 1.5% and 3.4% lower than the Street estimates.

Fidelity National Information Services, Inc. (NYSE:FIS) share price dropped more than 7% on Tuesday despite the company’s reported Q4 beat. Adjusted EPS came in at $1.92, compared to the consensus estimate of $1.90. Revenue was $3.67 billion, $40 million below the consensus estimate. Organic revenue grew around 11% year-over-year, accelerating from 10% in Q3, with particular strength in Capital Markets, while Merchant & Banking both missed analysts’ expectations.

Although Omicron impacted Q4 results, January trends are beginning to show signs of a rebound, but difficult comps in the Banking segment in Q1/22 results in a slower start to the year.