Is It Too Late To Buy Fidelity National Information Services Inc (NYSE:FIS)?
Today we’re going to take a look at the well-established Fidelity National Information Services Inc (NYSE:FIS). The company’s stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Fidelity National Information Services’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for Fidelity National Information Services
Is Fidelity National Information Services still cheap?
Fidelity National Information Services appears to be overvalued by 22% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$104.45 on the market compared to my intrinsic value of $85.89. This means that the opportunity to buy Fidelity National Information Services at a good price has disappeared! In addition to this, it seems like Fidelity National Information Services’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Fidelity National Information Services?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with a negative profit growth of -18.37% expected next year, near-term growth certainly doesn’t appear to be a driver for a buy decision for Fidelity National Information Services. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? If you believe FIS should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on FIS for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Fidelity National Information Services. You can find everything you need to know about Fidelity National Information Services in the latest infographic research report. If you are no longer interested in Fidelity National Information Services, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
