Fiserv Inc (
recently signed contracts with four leading credit unions namely,
Abri, MIDFLORIDA, Southeast Federal Credit Union and Wauna. The
credit unions chose four different account processing solutions
from Fiserv to upgrade their enterprise infrastructure.
Fiserv's long-time customer Abri selected XP2 account processing
solution. MIDFLORIDA chose DNA, flagship product of Open Solutions,
which Fiserv acquired in early 2013. Since the completion of the
acquisition in Jan 2013, Fiserv has won 40 contracts for the DNA
Southeast Federal Credit Union and Wauna Credit Union selected
Fiserv's Portico and CUnify solutions, respectively. These wins
reflect Fiserv's growing popularity among financial institutions,
which bodes well for top-line growth.
Fiserv's broad customer base and various contract wins are the key
growth catalysts. This is evident from the fact that Payments and
Industry Products revenues increased 8.7% year over year to $590.0
million in the first quarter.
Fiserv signed 82 electronic bill payment clients and 30 debit
processing clients during the first quarter. The company also
signed 51 new Mobiliti customers and 63 new Popmoney clients.
Moreover, accretive acquisitions have been a key growth driver for
Fiserv over the years. Acquisitions have helped it to diversify
product portfolio and upgrade technology. The company's advance
product portfolio is likely to further enhance its revenue streams.
The new partnership with
will allow Fiserv to offer debit EMV solutions for the Accel debit
network. We believe that EMV-based card solutions have significant
growth opportunities in the U.S. and this partnership will boost
Fiserv's EMV offering in the long run.
Higher recurring revenues, operational efficiencies and strong
internal growth are expected to result in solid earnings and free
cash flow growth. However, the back-end loaded guidance is expected
to remain a concern in 2014. We also believe that intensifying
competition from the likes of
Global Payments (
MasterCard Inc. (
remains a major headwind.
Currently, Fiserv has a Zacks Rank #3 (Hold).
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