$FISV

For the first time in its history, touched the RSI band. And for now, it’s holding.

The root of this collapse is that the previous management overly focused on short-term targets, postponed investments, and disrupted capital allocation with aggressive share buybacks executed at expensive levels.

Once the Argentina effect reversed, the real performance showed up; in Q3, organic growth fell to 1%, Financial Solutions contracted 3%, the margin declined 320 basis points, and adjusted EPS dropped 11%.

After this weakening, management sharply cut guidance: organic growth was reduced from 10% to 3.5%–4%, and adjusted EPS fell from $10.15–$10.30 to $8.5–$8.6.

The former CEO’s heavy stock selling after overly optimistic guidance, and buybacks being done at high prices, are other factors that deepened the loss of trust.

New CEO Mike Lyons’ One Fiserv plan includes steps such as a customer-satisfaction-first approach, leadership renewal, simplification (reducing the number of platforms), and more disciplined capital allocation. However, it’s emphasized that this transformation may require more investment and create margin pressure in the short term, and that execution risk is high.

There is also litigation risk.

It may be cheap by traditional metrics, but by my way of thinking, it’s expensive!