Fiserv (NYSE:FI) announced upbeat first-quarter 2025 results on Thursday, exceeding analyst expectations on both revenue and earnings per share. Revenue climbed 5% year-over-year to $5.13 billion, surpassing the anticipated $4.84 billion. This growth was driven by strong performances in both the Merchant Solutions and Financial Solutions segments, each seeing increases of 5% and 6%, respectively. Adjusted revenue also saw a 5% year-over-year increase, reaching $4.79 billion.
Adjusted earnings per share (EPS) came in at $2.14, outperforming the consensus estimate of $2.07. Fiserv’s CEO, Frank Bisignano, highlighted the company’s resilience and the strength of its two core segments, emphasizing their interconnectedness and future-proofed nature. The company reaffirmed its full-year guidance, projecting organic revenue growth of 10%-12% and adjusted EPS between $10.10 and $10.30, representing a 15%-17% year-over-year increase.
Despite the positive results, the market reaction was somewhat muted, with Fiserv shares experiencing a modest 1.5% increase to $179.54 on Friday. This subdued response may be attributed to the subsequent actions of several analysts. Following the earnings announcement, several analysts revised their price targets for Fiserv downwards. BMO Capital maintained an Outperform rating but reduced its price target from $254 to $232. Similarly, UBS maintained a Buy rating while lowering its target from $265 to $255, and Keefe, Bruyette & Woods adjusted its price target from $260 to $240, while maintaining an Outperform rating.
The divergence between Fiserv’s strong Q1 performance and the more conservative analyst forecasts suggests a degree of caution in the market regarding the company’s future prospects. While the company exceeded expectations in the first quarter, analysts appear to be factoring in potential headwinds or uncertainties that could impact future growth. Investors will want to keep a close eye on Fiserv’s performance in the coming quarters to see if the company can maintain this momentum and justify the higher end of its guidance.
