DCF Studio

    FISV · NMS

    Fiserv, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 152.39

    Market price

    USD 47.19

    Implied upside

    +222.9%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 152.39+222.9%
    Exit multiple
    USD 95.88+103.2%
    Market price
    USD 47.19

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn8bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 22.5bnUSD 23.9bnUSD 25.3bnUSD 26.9bnUSD 28.5bn+6.1%
    EBITUSD 5.7bnUSD 6.1bnUSD 6.4bnUSD 6.8bnUSD 7.3bn+6.1%
    NOPATUSD 4.6bnUSD 4.9bnUSD 5.2bnUSD 5.5bnUSD 5.9bn+6.1%
    Add depreciation & amortisationUSD 3.6bnUSD 3.8bnUSD 4.1bnUSD 4.3bnUSD 4.6bn+6.1%
    Less capital expenditureUSD -1.8bnUSD -1.9bnUSD -2.0bnUSD -2.1bnUSD -2.3bn+6.1%
    Less increase in working capitalUSD -321.3mUSD -340.9mUSD -361.8mUSD -383.9mUSD -407.4m+6.1%
    Free cashflow to firmUSD 6.2bnUSD 6.5bnUSD 6.9bnUSD 7.4bnUSD 7.8bn+6.1%
    Discount factor0.96530.89940.83800.78090.7276-
    Present valueUSD 5.9bnUSD 5.9bnUSD 5.8bnUSD 5.7bnUSD 5.7bn-1.1%
    Present Value Of The ForecastUSD 29.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.000As reported
    Cost of equity10.50%Risk-free + beta x equity risk premium
    Cost of debt5.66%Interest expense / average total debt
    Market capitalisationUSD 25.1bn46.3% of capital
    Total debtUSD 29.1bn53.7% of capital, book value as a proxy
    Tax rate19.0%Effective, capped at statutory
    WACC7.32%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 152.39

    74% of EV

    Forecast FCFF, final year
    USD 7.8bn
    Capex at depreciation, working capital in reinvestment
    USD 7.7bn
    Less reinvestment at g/ROIC (30.6% of NOPAT)
    USD -2.4bn
    Capitalised
    USD 5.4bn
    ROIC (reported)
    8.2%
    Terminal value, undiscounted
    USD 114.0bn
    Terminal value, discounted
    USD 83.0bn
    Enterprise value
    USD 112.0bn
    Less net debt
    USD 28.3bn
    Equity value
    USD 83.7bn

    Exit at 6.0x EBITDA

    Value per shareUSD 95.88

    64% of EV

    Terminal value, undiscounted
    USD 71.4bn
    Terminal value, discounted
    USD 51.9bn
    Enterprise value
    USD 81.0bn
    Less net debt
    USD 28.3bn
    Equity value
    USD 52.6bn

    Spread between methods: 46%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.32%245.57262.32284.77316.57365.45
    6.32%186.18192.97201.36212.07226.35
    7.32%147.12149.57152.39155.72159.75
    8.32%120.00120.59121.18121.77122.36
    9.32%101.65102.16102.66103.17103.68

    Outlined: this model. Green text: above today's price of 47.19. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year6.1%-11.4%-17.5pp
    EBIT margin25.4%8.1%-17.3pp
    Discount rate7.3%14.6%+7.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.