Fiserv stock continued its strong downward trend today, June 15, after the company announced new management changes, with its CEO leaving after 18 months on the job. FISV slipped to $47.9, its lowest level since 2016 and 80% below its year-to-date high. Its market cap has slumped from $130 billion to $25 billion, a $105 billion wipeout.
Fiserv Stock Has Become Cheap as the Crash Continues
The FISV stock price continued its strong downward trend after the firm announced that Takis Georgakopoulos will become the new CEO. He replaces Mike Lyons, who stepped down to become the CEO of Truist Financial Corporation.
The stock plunged because investors historically don’t like companies with high CEO turnover. This is one of the top reasons why the PayPal stock has plunged in the past few years.
Fiserv, a leading payments provider for companies like Walmart, Dunkin, US Bank, and Northwest Bank, has come under pressure in the past few months as its revenue growth has slowed.
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Its most recent results showed that its adjusted revenue dropped by 2% in Q1 to $4.68 billion. This retreat was driven by its financial solutions business, which retreated by 6%. Revenue from its merchant solutions segment fell by 1%.
Fiserv’s profitability also continued to decline, with adjusted EPS down 16% YoY. This performance made it one of the worst-performing companies in the payment industry.
Wall Street analysts are predicting modest growth this year. Its revenue is expected to come in at $20 billion, up by 1% YoY. It will then make $20.8 billion next year, a 4% YoY increase. Also, the company’s earnings per share are expected to fall to $8.12 from the previous $8.6.
Still, on the positive side, the ongoing FISV stock crash has made it one of the cheapest names in the S&P 500 Index. It has a forward price-to-earnings ratio of just 9, lower than the five-year average of 26.
Another potential catalyst is the new CEO succeeding in engineering a turnaround for the company. As such, this would make it one of the best bargains to scoop.
However, for now, there is a risk that the cheap valuation is a value trap. Analysts recommend giving the company and the new CEO time to map their turnaround strategy.
FISV Stock Price Technical Analysis
The weekly chart shows that the FISV share price has crashed in the past few months, falling from a high of $239 in March last year to $47 today. It retreated below the crucial support level of $53, its lowest point on March 23rd. It also slumped below $87, its lowest level in June 2022.
The stock has plunged below all moving averages, while the Relative Strength Index (RSI) slipped to 27. Therefore, while the Fiserv stock price will ultimately rebound, it will likely remain under pressure for a while.
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