Fidelity National Information Services, Inc.
) is set to report first quarter 2014 results on May 1. Last
quarter, it posted a 13.4% positive surprise. We note that
Fidelity has outperformed the Zacks Consensus Estimate in the
preceding four quarters with an average positive surprise of
FIDELITY NAT IN (FIS): Free Stock Analysis
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Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Fidelity's commanding position in the financial services market,
increasing international exposure, recurring revenue model,
diversified product portfolio, cost synergies from acquisitions
and a loyal customer base will drive growth over the long term.
Moreover, strong demand for its solutions such as the Cardless
Cash Access solution and Active Analytics suite are expected to
boost top-line growth in the near term. The company continues to
win contracts from banks and financial institutions in the
overseas market, which will further drive its market share.
Additionally, the company's recent partnership with
) to fight cybercrime is also a significant positive, as it will
help it to expand in the fast growing cyber security market.
However, increasing consolidation in the banking sector,
challenging environment for the Payments Solutions business and
an uncertain regulatory environment are the primary headwinds, in
our view. Moreover, competition from
) is a major concern in the near term.
Our proven model does not conclusively show that Fidelity is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
The Most Accurate estimate stands at 56 cents and coincides with
the Zacks Consensus Estimate. Hence, the difference is 0.00%.
Fidelity's Zacks Rank #3 (Hold) when combined with 0.00% ESP
makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.