) is set to report first quarter 2014 results on Apr 29. Last
quarter, it posted a 2.47% negative surprise. However, we note
that Fiserv has an average positive surprise of 1.90% over the
past four quarters.
Let's see how things are shaping up for this announcement.
Growth Factors This Past Quarter
Fiserv has expanded its foothold in the financial and payment
solutions business supported by its broad customer base and
various contract wins from the likes of
Bank of America
American Electric Power
Moreover, Fiserv's diversified product portfolio and continued
technology upgrades are expected to boost its top-line growth.
Additionally, 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 intensifying competition from
the likes of
) remains a major headwind, going forward.
Our proven model does not conclusively show that Fiserv 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 74 cents, which coincides
with the Zacks Consensus Estimate. Hence, the difference is of
Zacks Rank #3 (Hold):
Fiserv's Zacks Rank #3 when combined with a 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.
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