16 Most Undervalued Tech Stocks To Buy Now

3. Fiserv, Inc. (NYSE:FI)

Short % of Shares Outstanding: 1.20%

Number of Hedge Fund Holders: 73

Forward Price to Earnings Ratio as of August 28: 19.49

Fiserv, Inc. (NYSE:FI) is a leading fintech company that provides a range of solutions to help businesses process and manage payments and transactions. The company operates through two main business segments, namely Merchant solutions and Financial Solutions.

It also provides a cloud-based Point-of-Sale (POS) software, called Clover for businesses which has been driving robust revenue growth for the company. The FQ2 2024, was led by a strong 28% growth in Clover revenue. The platform reached $313 billion in annualized gross payment volume (GPV) up 17% year-over-year. Moreover, its value-added services (VAS) penetration rate also improved by 20% during the same time, indicating a growing market usage.

Overall, a robust quarterly performance, with adjusted revenue of $4.8 billion growing 7% and adjusted earnings per share up 18% year-over-year, led to a rise in full-year guidance. Management now expects adjusted EPS between $8.65 – $8.80 and has also improved its free cash flow guidance to $4.7 billion from $4.5 billion.

In addition, Fiserv, Inc. (NYSE:FI) is also expanding its products and service offerings. Management has indicated plans to introduce the Clover platform for restaurants adding more customers to its already profitable platform. Over the past 5 years, the company has grown its top line by 27% and bottom line by 29.14%. Investors are keeping an eye on its performance, the stock has gained more than 39% over the year to reach its all-time high of $171.19.

FI is still undervalued despite huge gains, it is trading at 19 times its forward earnings. Analysts expect its earnings to grow by 16.20% during the year to reach $8.74.

It was held by 73 hedge funds in Q2 2024, with stakes totaling $2.5 billion. Harris Associates is the top share holder of the company with a position worth $2.20 billion.

Baron FinTech Fund stated the following regarding Fiserv, Inc. (NYSE:FI) in its first quarter 2024 investor letter:

“Payments was another standout theme thanks to double-digit gains from global payment companies Mastercard Incorporated and Fiserv, Inc. (NYSE:FI). Fiserv shares rose in response to robust quarterly earnings, supported by strength in Clover, its point-of-sale system for small businesses. Clover revenue jumped 30% with greater adoption of value-added services. Despite investor concerns about macroeconomic weakness potentially impacting Fiserv’s outlook, the company reaffirmed its 2024 guidance. We remain optimistic as Fiserv continues to execute well on its long-term vision, and we believe Clover will play a key role in driving growth for the company in the years ahead.”