Key Points
Fiserv missed on the bottom line in a major way in the third quarter, and its stock plunged.
It recently got a new CEO who’s developing a plan to embed more AI in the business and meet consumer needs.
The market will want to see the company moving beyond stability and back into growth.
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Fiserv (NASDAQ: FISV) is one the most important financial companies in the world. It’s the name behind many flashier ones, providing payment processing and other financial services.
However, it recently faltered in some important ways, and its stock has tumbled 73% over the past year. Let’s see how it could bounce back and beat the market from here.
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What went wrong
First, it’s important to identify what’s gone wrong when a giant that works with 10,000 institutional partners and is a crucial player in the economy begins to slide. The basic premise is that the company grew large and entrenched, losing market share to smaller, more nimble upstarts with innovative technology.
Although the stock had been falling for most of the year, it got clobbered after the third-quarter report in October. It missed on the top and bottom lines, coming in $0.61 below expecations for earnings per share (EPS).
The company recently hired a new CEO, Mike Lyons, to stabilize operations and establish a new growth strategy. He developed the One Fiserv plan to reset the company and boost the business. The plan involves using more artificial intelligence (AI) and new technology to meet customer needs and setting a new baseline to measure progress. There are many steps, such as hiring a new management team and focusing on quality recurring revenue streams, and Lyons warned that it’s going to take time to see the results.
What has to go right
Fiserv is in a great position to stage a comeback. It’s still the dominant player in multiple categories, and as a tech company, it has a strong digital platform that it can direct to meet changing customer demand. For example, it powers 70% of the financial institutions that partner with Zelle.
It recently made a few important announcements about deals with partners that help bring it forward, including a collaboration with Microsoft to bring Copilot into its development process and a partnership with Mastercard to bring agentic AI to its merchant base.
The company already made a positive impression on the market in its fourth-quarter report, released in early February, which demonstrated stability. Revenue was flat year over year, in line with guidance, and it maintained 2026 guidance.
Going forward, investors will want to see higher revenue growth, which will indicate a re-engaged client base, and a raised outlook, which will demonstrate that it’s passing the stability phase and moving into the growth phase. There will be plenty of softer metrics that tell more of the story, but a market beat will require evidence that the company is revitalizing its business in a tangible way.
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
