FIS
Fidelity National Information Services, Inc.
$43.55
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 37.1% above fair value
You pay
$43.55
Bear
$25.41
Fair
$31.76
Bull
$38.11
Bear
$25.41
-41.6%
$1.21 × 12x P/E
Fair
$31.76
-27.1%
$1.21 × 15x P/E
Bull
$38.11
-12.5%
$1.21 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
36.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $63.50 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $31.76 per share.
Warnings
The company's reported profits differ from official accounting profits by 61%. Check what costs are being left out of the adjusted number.
The company pays out 224% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $63.50 (from 37 analysts). Our estimate is 71% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples