Value Fund Alert: Fiserv, Inc.
Top Investor David Katz Declares Fiserv (FI) a “Table-Pounding Buy”
Hello,
A new alert just hit our radar! We’ve identified a significant new purchase by David Katz, Chief Investment Officer at Matrix Asset Advisors. Katz is an investor we follow closely due to his outstanding long-term track record; since the fund’s inception in 1999, he has delivered a 9.14% annualized return, beating the Russell 1000 Value index by approximately 2% per year.
Company: Fiserv, Inc. (NYSE: FI)
Fund Manager: David Katz (Matrix Asset Advisors)
Action: Buy
Stock Price: ~$119.00 (as of Oct 17, 2025)
Forward P/E: ~10.6x (based on current estimates)
Not financial advice. Do your own research.
Company Overview
Fiserv is a global leader in payments and financial technology, providing the essential infrastructure for banks, merchants, and businesses. Its business is anchored by two core segments: Financial Solutions (core banking, digital platforms) and Merchant Solutions, which features the high-growth Clover® platform.
Key Q2 2025 Financial Results
- Revenues: Adjusted revenue of $5.2 billion, an increase of 8% year-over-year.
- Adjusted EPS: Grew 16% to $2.47.
- Operating Margin: Adjusted operating margin expanded 120 basis points to 39.6%.
- Guidance: Full-year 2025 guidance refined to ~10% organic revenue growth and 15-17% adjusted EPS growth.
Why Fiserv Stands Out
- The Clover Growth Engine: Clover is the primary catalyst. It’s an all-in-one OS for SMBs creating a durable ecosystem. Annualized payment volume hit $337 billion in Q2 2025, with a $3.5 billion revenue target for 2025.
- Exceptional Profitability: A cash-generating machine with a ~40% adjusted operating margin (39.6% in Q2 2025). This fuels aggressive share buybacks, with $5.5 billion returned to shareholders in 2024.
- Durable Revenue Base: Deep integration with thousands of banks and merchants creates high switching costs and predictable revenue streams, supporting its 39-year track record of double-digit adjusted EPS growth.
Valuation Snapshot
Forward P/E and Market Cap as of Oct 17, 2025. Margin and Growth per Q2 2025 report.
Competitive Landscape
Fiserv operates in the competitive fintech space, primarily against other large-scale payment processors and financial technology providers.
| Company | Key Strength | Relative Threat |
|---|---|---|
| Fiserv (FI) | Clover ecosystem, bank relationships, scale | Our focus |
| Global Payments (GPN) | Merchant acquiring, integrated software | ⭐⭐⭐⭐ |
| FIS (FIS) | Core banking, capital markets tech | ⭐⭐⭐ |
| Block (SQ) | SMB focus (Square), consumer app (Cash App) | ⭐⭐⭐ |
Competitive Ratio Analysis
| Company | Forward P/E (x) | Op. Margin (TTM %) | Est. Rev Growth (Next Yr %) |
|---|---|---|---|
| Fiserv (FI) | ~10.6 | 30% | 7.5% |
| Global Payments (GPN) | 6.34 | 25.9% | 4.5% |
| FIS (FIS) | 11.3 | 22% | -4.8% |
Fiserv Forward P/E as of Oct 17, 2025. Est. Rev Growth (Next Yr) based on Yahoo Finance analyst consensus estimates where available. Op. Margin (TTM) from Yahoo Finance where available. Note: Fiserv reported a higher Adjusted Operating Margin of 39.6% in its Q2 2025 report.
Margin of Safety
Fiserv’s margin of safety is rooted in business quality and durability, not just a low multiple.
- Predictable Earnings: A long history of consistent double-digit EPS growth provides high confidence in future cash flow generation.
- Fair Valuation: A forward P/E around 10.6x for a business growing earnings at 15-17% offers a classic GARP (Growth at a Reasonable Price) profile, appearing attractively priced.
- Wide Moat: High switching costs, extensive distribution through bank partners, and the sticky Clover ecosystem protect against competition.
Analyst Insights
The consensus view on Wall Street aligns with the bullish sentiment, recognizing Fiserv’s strong execution and attractive valuation relative to its growth prospects. Price targets generally reflect a significant upside from current levels.
Analyst Price Target Distribution
Analyst Recommendations Summary
Key Takeaways
- Clear Growth Catalyst: Clover is on track for $3.5B in revenue and continues to rapidly expand its payment volume and value-added services.
- Superior Financial Model: High margins (~40% adjusted), strong free cash flow ($5.3B TTM), and a commitment to shareholder returns via buybacks define the business.
- Attractive Valuation: The stock trades at a significant discount (Forward P/E ~10.6x) relative to its consistent, double-digit growth profile (15-17% Adj. EPS growth expected in 2025)[cite: 2133].
- Strong Investor Conviction: The “table-pounding buy” call from a respected value investor adds a layer of institutional confidence.
Timing & Catalysts
For investors considering a position, the next earnings release is a key catalyst. Fiserv is expected to report its Q3 2025 results around **late October 2025**. Waiting for this announcement could provide further data to validate the investment thesis.
Is Fiserv in Our Portfolio?
Find out if Fiserv (FI) made the cut and see our full model portfolio holdings.
Frequently Asked Questions (FAQ)
What is Fiserv’s main growth driver?
Fiserv’s primary growth driver is its Merchant Solutions segment, specifically the Clover® platform. It serves as an all-in-one operating system for small and medium-sized businesses, creating a strong, integrated ecosystem.
Is Fiserv profitable?
Yes, Fiserv is highly profitable. In Q2 2025, it reported an adjusted operating margin of 39.6% and is on track for its 40th consecutive year of double-digit adjusted EPS growth[cite: 2129].
Does Fiserv pay a dividend?
No, Fiserv does not currently pay a dividend. The company prioritizes returning capital to shareholders through share repurchases, buying back $5.5 billion of its stock in 2024.
