Company Reports

Fidelity National Information Services' acquisition of Worldpay in 2019 was one of three similar transformational deals that took place in short order. But FIS has more recently decided to undo the Worldpay deal as it struggled with operational issues within the Worldpay business.

Following the sale of a majority interest in the Worldpay business in January, FIS has returned to a focus on its legacy operations. We think the new FIS will be a more stable operation with lower long-term growth prospects. The first quarter marked a fairly strong start to this new direction. We will maintain our $80 fair value estimate for the narrow-moat company and see the shares as modestly undervalued.

Fidelity National Information Services' acquisition of Worldpay in 2019 was one of three similar transformational deals that took place in short order. But FIS has since decided to undo the Worldpay deal as it struggled with operational issues within the Worldpay business.

FIS didn’t finish 2023 on an impressive note, but with its having recently completed the sale of a majority interest in the Worldpay business, the end of the year was more about setting the stage for what comes next, and the company’s expectations are roughly in line with our own. We will maintain our $78 fair value estimate for the narrow-moat company and see the shares as modestly undervalued.

Fidelity National Information Services' acquisition of WorldPay in 2019 was one of three similar transformational deals that took place in short order. But FIS decided to undo the WorldPay deal as it struggles with operational issues within the WorldPay business.

Fidelity National Information Services’ third-quarter results provided a look at how the company will perform following the sale of Worldpay operations, as it is now reporting Worldpay as discontinued operations. Overall, the company should see lower growth but also become a more stable and predictable company that focuses on capital return. While we think the course management chose for Worldpay was not optimal, this is not an unattractive proposition. We will maintain our $76 fair value estimate for the narrow-moat company and see shares as undervalued.

Fidelity National Information Services' second-quarter results were not impressive in an absolute sense, but the company is holding steady and tracking a bit ahead of our expectations. We remain comfortable with our $76 per share fair value estimate for the narrow-moat company and consider shares undervalued, although the long-term picture will be more complicated given the company's decision to maintain a minority stake in Worldpay.

Fidelity National Information Services' acquisition of WorldPay in 2019 was one of three similar transformational deals that took place in short order. But FIS decided to undo the WorldPay deal as it struggles with operational issues within the WorldPay business.

Narrow-moat Fidelity National Information Services had previously announced its intention to spin off its Worldpay merchant acquiring operations, but it has now agreed to sell a majority stake to private equity firm GTCR instead. GTCR will take a 55% stake at a $17.5 billion valuation, with potentially another $1 billion in the future based on GTCR’s returns. The deal values Worldpay at 9.8 times expected 2023 EBITDA, including corporate and additional stand-alone costs.

Fidelity National Information Services', or FIS’, first-quarter earnings were nothing to get excited about in an absolute sense and remain weak relative to historical performance. Overall revenue was up 3% year over year on an organic basis, and the company saw margins contract. However, given the issues FIS is currently facing and the impending spinoff of the Worldpay business, results for the narrow-moat company were encouraging, in our view. We will maintain our $83 fair value estimate.

Fidelity National Information Services' acquisition of WorldPay in 2019 was one of three similar transformational deals that took place in short order. But while its peers remain full speed ahead with their approach, FIS has decided to undo the WorldPay deal, as it struggles with operational issues within the WorldPay business.

Fidelity National Information Services' acquisition of WorldPay in 2019 was one of three similar transformational deals that took place in short order. But while its peers remain full speed ahead with their approach, FIS has decided to undo the WorldPay deal, as it struggles with operational issues within the WorldPay business.

Fidelity National Information Services reported a disappointing end to a disappointing year. As result of the company’s difficulties, management has decided to spin off the WorldPay business. The short- and long-term outlooks for WorldPay appear to be much weaker than we had anticipated, but we question whether current management is mistaking poor execution for a poor strategy and throwing out the baby with the bathwater. With the fundamental picture now dramatically changed, we expect to reduce our fair value estimate to $83 from $128. We will maintain our narrow moat rating.

Fidelity National Information Services' acquisition of Worldpay in 2019 was one of three similar deals that took place in short order. We don’t believe the move was especially attractive relative to the other two, and we don’t believe the company materially strengthened its competitive position as a result. However, we do think there is a valid strategic rationale for these deals, and the introduction of Worldpay’s acquiring business should boost overall long-term growth, given the ongoing shift toward electronic payments.

Narrow-moat Fidelity National Information Services has faced some issues this year, and the company announced some moves to accelerate the process of getting back on track. First, Stephanie Ferris will take over as CEO starting Dec. 16, instead of waiting for January. Second, Jeffrey Goldstein will take over as chairman, also effective Dec 16. With this new team in place, the company will initiate a strategic review, focused on identifying growth and cost reduction opportunities. While a change in management has been planned for some time and we expected changes as a result of the switch, this news suggests the company wants to move quickly. We appreciate the company’s diligence, but the success of this process will ultimately hinge on the details of the plan that results from this review. We will maintain our $128 fair value estimate.

Fidelity National Information Services' acquisition of Worldpay in 2019 was one of three similar deals that took place in short order. We don’t believe the move was especially attractive relative to the other two, and we don’t believe the company materially strengthened its competitive position as a result. However, we do think there is a valid strategic rationale for these deals, and the introduction of Worldpay’s acquiring business should boost overall long-term growth, given the ongoing shift toward electronic payments.

Narrow-moat Fidelity National Information Services reported a difficult third quarter, as the company continues to lag its peers. Overall revenue was up 5% year over year on an organic basis, and the company saw a decline in margins, with management pointing to some macro factors that have started to pressure growth and margins. All in all, the near-term environment for the firm appears to be relatively difficult. After reviewing our assumptions, we expect to reduce our fair value estimate to $128 from $137 per share. While we appreciate the near-term headwinds the company is seeing, we still see the shares as materially undervalued from a long-term perspective.

Fidelity National Information Services' acquisition of Worldpay in 2019 was one of three similar deals that took place in short order. We don’t believe the move was especially attractive relative to the other two, and we don’t believe the company materially strengthened its competitive position as a result. However, we do think there is a valid strategic rationale for these deals, and the introduction of Worldpay’s acquiring business should boost overall long-term growth, given the ongoing shift toward electronic payments.

FIS' second-quarter results were solid, in our view; like its peers, the company is benefiting from some bounceback in its acquiring operations this year. However, the stronger dollar and higher interest rates will create some drags as we move through the year, and FIS modestly lowered its revenue and earnings per share targets for 2022 as a result. These issues don’t concern us much, and we will maintain our $137 fair value estimate for the narrow-moat company.

Fidelity National Information Services produced solid first-quarter results. Like its peers, the company is seeing some bounceback from coronavirus-related headwinds. Overall, revenue increased 9% year over year on an organic basis. We will maintain our $137 fair value estimate. We continue to see the shares as undervalued from a long-term perspective, as we believe the market is overly skeptical about the narrow-moat company’s long-term prospects.