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Q3 Earnings Preview for Fidelity National Information Services (NYSE:FIS)

in EARNINGS/INVESTING IDEAS by

Fidelity National Information Services, Inc. (NYSE:FIS) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $1.41/share on revenue of $3.179 billion. The consensus earnings per share (EPS) of $1.41/share is based on a poll of 31 analysts and represents a decline in eps of −1.7% over the same quarter last year, when the company reported earnings of $1.43/share.

The revenue forecast of $3.179 billion based on a poll of 26 analysts implies a year-over-year (YoY) growth in revenue of 12.6%. Last year the company reported $2.822 billion in revenue for the quarter.

Expected to report EPS contraction of −1.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,178.75 $2,822.00 12.6%
EPS $1.41 $1.43 −1.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarter.

What are your expectations from Fidelity National Information Services, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.10 $1.15 5.0% Beat
Q1, 2020 $1.27 $1.28 0.5% Beat
Q4, 2019 $1.53 $1.57 2.4% Beat
Q3, 2019 $1.35 $1.43 5.6% Beat
Q2, 2019 $1.78 $1.78 0% Met
Q1, 2019 $1.57 $1.64 4.8% Beat
Q4, 2018 $1.58 $1.60 1.1% Beat
Q3, 2018 $1.30 $1.33 2.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $148.93 $146.50 −1.6% Decline
May 7, 2020 $131.91 $128.23 −2.8% Decline
February 13, 2020 $147.96 $157.44 6.4% Increase
November 5, 2019 $131 $130.89 −0.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.60, the model suggests that the company is likely an earnings manipulator. A value of −1.60 implies a 5.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Fidelity National Information Services, Inc. is currently trading at $139.42/share, down −3.4% for the day. The company is trading at approximately 88.1% of its 52-week high of $158.21/share. The company’s stock price is down −4.8% since the last earnings report and down −0.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 40.13 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:FIS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 2,786.62 and a forward P/E multiple of 26.02.

Fidelity National Information Services, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.76. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $139.42
P/E Ratio 2,786.6x
P/E Ratio (Fwd) 26.0x
PEG Ratio −29.5
Total Debt / Total Capital 18.1%
Levered Free Cash Flow $2.95 billion
EV / EBITDA 24.4x

Finbox

Fidelity National Information Services, Inc. is a large-cap stock with a market capitalization of $86.385 billion and a total enterprise value of $105.3 billion. The company operates in the Information Technology sector and the IT Services industry.

Fidelity National Information Services, Inc. operates as a financial services technology company in the United States and internationally. It operates through three segments: Merchant Solutions, Banking Solutions, and Capital Market Solutions. The Merchant Solutions segment offers merchant acquiring, integrated payment, and global e-commerce solutions. The Banking Solutions segment provides core processing and ancillary applications; digital solutions, including Internet, mobile, and e-banking; fraud, risk management, and compliance solutions; electronic funds transfer and network services; card and retail payment solutions; wealth and retirement solutions; and item processing and output services. The Capital Market Solutions segment offers securities processing and finance, global trading, asset management and insurance, and corporate liquidity solutions. The company was founded in 1968 and is headquartered in Jacksonville, Florida.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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