April 3, 2018

FIS – Market expectations are for Uniform ROA expansion from recent highs, but management has concerns about their assets, margin guidance, and technology


      • Fidelity National Information Services, Inc. (FIS:USA)currently trades near recent highs relative to UAFRS-based (Uniform) Earnings, with a Uniform P/E of 23.8x, implying bullish expectations for the firm. However, management has concerns about their assets, margin guidance, and technology
      • Specifically, management may be downplaying concerns about the strength of their assets, and may lack confidence in the sustainability of strong growth in their digital and mobile solutions. Furthermore, they may lack confidence in their ability to meet adjusted earnings guidance of $5.10 to $5.30 per share, and may be exaggerating the expected impact of divestitures on their EBITDA margin forecast. In addition, they may be downplaying concerns about their ability to drive rapid and seamless integration across solutions to unify user interfaces and client experiences, and may lack confidence in the potential of their next-generation post rate solution, in terms of its ability to improve processing power and performance over legacy trade technology

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