Fiserv Has NEVER Done This Before—Is It a Screaming Buy?
Fintech stock Fiserv Inc. (NASDAQ: FISV) has been going through one of its sharpest selloffs ever. Shares have fallen almost 50% in two weeks, adding to an already horrendous year, and sending the stock back to 2017 price levels. Fiserv shares are now down roughly 70% from March’s all-time high, a stunning reversal for what had been one of the S&P 500’s best-performing stocks last year.
This decline has been so severe that it’s now in the record books. Fiserv’s relative strength index (RSI), a technical momentum indicator, has sunk to its lowest level ever. In four decades of trading, the stock has never been this technically oversold. That alone captures the scale of the stock’s selloff, but for some, it also raises the question of whether this might be the perfect entry point for a comeback. Let’s take a closer look.
What Triggered the Collapse
Let’s start with the background. While shares had been selling all through the summer, the most recent catalyst was a terrible earnings report two weeks ago. Fiserv missed expectations on both revenue and profit, cut forward guidance, and announced a massive strategy overhaul designed to streamline its operations.
However, instead of reassuring investors, the surprise miss and the vague reset triggered panic, sending the few remaining bulls running for the exit.
It didn’t help that, alongside weak numbers and a muddled turnaround plan, Fiserv also announced sweeping leadership and board changes.
Even in the best of times, dramatic moves like this can rattle investors, and while they may prove beneficial long term, the immediate takeaway was one of disarray and panic.
Within hours, analysts from Morgan Stanley and Goldman Sachs downgraded their rating on the stock, issuing warnings of uncertainty and weak near-term visibility. The market reaction was understandably brutal. Fiserv went on to shed nearly half its value in just two weeks, and shares were setting fresh lows as recently as last Friday.
Technical Indicators Suggest a Turning Point
However, such extreme moves can signal opportunity. Thanks in large part to the post-earnings reaction, Fiserv’s RSI plummeted to the low teens—a level rarely seen in S&P 500 stocks—indicating the stock was extremely oversold. In all the corrections and bear markets the stock has weathered over 40 years, its RSI has never fallen this low.
This week, the selloff appears to have paused as the bears take a well-earned breather. But the longer that shares hold steady at their current level of $65, the more this breather could turn into a period of consolidation, and the $65 level into a line of support.
Analysts are already highlighting the comeback opportunity taking shape. Over the past fortnight, Sanford Bernstein reiterated its Buy rating and set an $80 target, while Oppenheimer did the same but with a $91 target. This week, the team at Susquehanna went even further with their $99 price target, pointing to upside of more than 50% from current levels. Despite the weak results and leadership turmoil, potential returns like that make Fiserv a hard stock to ignore.
Why the Risk/Reward Looks Compelling
Despite the selloff, Fiserv remains one of the largest players in the fintech space. Its platforms process billions of dollars in transactions, and recurring revenue still accounts for most of its income. The company’s cash flow is also considered an ongoing source of strength, which should give confidence to those starting to dip their toes in at these oversold levels.
Another point to consider is that once the dust settles, leadership transitions and resets like this often help reboot investor sentiment. If Fiserv can prove to Wall Street that it's evolving into a simpler, more streamlined version of itself, don’t be surprised if the stock starts to be snapped up.
After such a dramatic collapse, stabilization will take time. But history shows that collapses of this magnitude often create asymmetric opportunities. Fiserv doesn’t need perfection; it just needs a steady hand and a clearer plan. How the stock trades through the rest of the month will reveal whether investors believe it can deliver.
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