Fidelity National Information Services Inc.
) will provide its financial solutions to VW Credit Inc., the
auto finance segment of Volkswagen Group of America, to improve
its loan and leasing processing business in North America.
VW Credit will leverage Fidelity's AutoSuite, Default Manager
and Touchpoint solutions for efficiently running business
processes in a cost-effective manner. Moreover, Fidelity's
solutions will enable VW Credit to synchronize and integrate the
loan lease receivables, customer service, collections and
customer relationship management facility.
We believe that Fidelity's new customer wins and customer
retention success are the keys to the company's future prospects.
These agreements are likely to increase the company's market
share in future.
Fidelity provides banking and payment technology solutions and
has a strong clientele of financial institutions globally. We
believe that Fidelity's commanding position in the financial
services market, its increasing international exposure, recurring
revenue model, diversified product portfolio, cost synergies from
acquisitions and loyal and increasing customer base will drive
This is evident from Fidelity's results in the first nine
months of fiscal 2012. During this period, revenue from the
Financial Solutions segment was up 8.1% year over year, while the
Payment Solutions segment recorded marginal revenue growth of 1%.
As a result, total consolidated revenue increased 3.4%.
Separately, we believe that Fidelity is well positioned to
benefit from increasing investments in emerging technologies such
as mobile banking. Mobile banking is developing as an extension
of online banking, as mobile usage continues to accelerate
However, increasing consolidation in the banking sector, a
challenging environment for the Payment Solutions business and an
uncertain regulatory environment are the primary headwinds in our
We maintain our Neutral recommendation on a long-term basis
(for the next 6 to 12 months), primarily due to a
highly-leveraged balance sheet and intense competition from other
major players such as
Currently, Fidelity has a Zacks #2 Rank (Buy).
FIDELITY NAT IN (FIS): Free Stock Analysis
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