On the four Ms, Fiserv Inc. earns 62 for management and 78 for moat. The management score rests on a return on invested capital of 10.1% and a gross margin of 0.0% — figures that describe a business earning a respectable return on what it employs. Debt sits at 1.12x equity.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 7.4% a year, the rate measured from the filings. The exit multiple assumed is 14.7x. That produces an intrinsic value of $38.65, a 10-CAP price of $107.48 and a payback time price of $119.99, with the value zone set at the highest of the three, $119.99. Today's price of $63.80 sits inside that zone.
Fiserv Inc. currently reads as a strong business at a price the model supports. That is rare enough to warrant asking what the market sees that these figures do not.
| Price | $63.80 |
| Market cap | $34.3B |
| P/E ratio | 12.2x |
| Return on invested capital | 10.1% |
| Gross margin | 0.0% |
| Debt to equity | 1.12x |
| Free cash flow yield | 17.2% |
| Growth rate used | 7.4% |
| Growth rate measured | 7.0% |
| Exit multiple assumed | 14.7x |
| Company | Moat | Buy price |
| Cognizant Technology (CTSH) | 57 | $57.80 |
| Broadridge Financial Solutions (BR) | 95 | $134.87 |
| CDW (CDW) | 48 | $90.50 |
| Leidos (LDOS) | 86 | $189.74 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Fiserv Inc. rather than accepting ours.