Fidelity National Information Services, Inc. (FIS): what the price requires
At today's price, Fidelity National Information Services, Inc. (FIS) is priced for +3.8% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FIS
Headline
| Field | Value |
|---|---|
| Ticker | FIS |
| Company | Fidelity National Information Services, Inc. |
| Current price | $41.97/sh |
| Composition | Transaction processing and services 67% / Software maintenance 9% / Other recurring 4% / Software license 6% / Professional services 9% / Other non-recurring 5% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.1% |
| Operating margin today | 15.9% |
| Margin compression implied | -8.8pp |
| Implied growth | 3.8% |
| Multiple paid | 23x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.6pp (computed at the 7% minimum rate; the CAPM rate 6.2% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~21.1%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.35σ |
| cohort percentile (of 210 peers) | 64 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.70x | 5 | justifies |
| Earnings | 0.57x | 3 | justifies |
| Relative | 0.64x | 5 | justifies |
| Growth | 0.92x | 2 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.0%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | Negative/zero FCF — equity value floored at $0 |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $76.93 | 0.55x | yes | P/E 15.25x (blended: static sector reference 20x + trailing (TTM) 8x), scenarios: 12.6x / 15.3x / 17.9x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $58.10 | 0.72x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $55.85 | 0.75x | yes | BV/sh $30.90, ROE (TTM) 16.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $74.11 | 0.57x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $37.55 | 1.12x | yes | Rev $11.4B, growth 12% (input: historical growth; tapered), Terminal P/S: 1.6x / 1.9x / 2.2x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $61.92 | 0.68x | yes | EPS $5.16, growth 2% (input: historical EPS growth), PEG=4.06 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $74.16 | 0.57x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $3.85B × (1−21%) / WACC 5.0% → EPV (no growth) |
| Residual Income | Asset | $74.78 | 0.56x | yes | BV $30.90 + 5yr PV of (ROE (TTM) 16.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $59.90 | 0.70x | yes | √(22.5 × EPS $5.16 × BVPS $30.90) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $65.41 | 0.64x | yes | EBITDA $3.87B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $166.50 | 0.25x | yes | EPS $5.16 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $5.63 | 7.45x | yes | BV $30.90 × (ROIC 0.9% / WACC 5.0%) |
| P/Sales Sector | Relative | $33.19 | 1.26x | yes | Revenue $11.44B × sector P/S 1.5x |
| PEG Fair Value | Relative | $193.50 | 0.22x | yes | EPS $5.16 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $55.78 | 0.75x | yes | EPS $5.16 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $20.3b |
| Net debt / NOPAT (after-tax) | 14.14x |
| Net debt / operating income (pre-tax) | 11.17x |
| Interest coverage | 3.8x |
| Share count CAGR (buyback) | -4.2% |
| Burning cash | no |
Bullet Takeaways
The number that anchors the bull case is Banking recurring revenue: the segment grew 45% in Q1 2026, with 24% growth in recurring annual contract value, on the back of the Issuer Solutions acquisition and a sticky core-processing base.
The stock is cheap on every method that fits it. At $38 it trades below relative valuation near $76, the excess-return methods near $56 to $74, and the earnings-power read above $100, with the implied growth assumption only about 4.5% a year.
The catch is the balance sheet and the deal history. FIS carries roughly $21 billion of debt after the $13.5 billion Issuer Solutions purchase, and its Capital Markets segment is softening, so the discount is the market's verdict on a deal-driven model.
Bull Case
The single most decisive metric for FIS is the trajectory of its recurring Banking revenue, and it has turned sharply higher. The Banking segment grew 45% in Q1 2026 with 24% growth in recurring annual contract value, the cleanest possible signal that the core of the business is reaccelerating rather than fading. That matters because the Banking segment serves financial institutions with core processing and transaction software that the 10-K describes as critical to clients' operations and a source of relative stability to revenue (accession 0001136893-26-000013). A bank does not rip out the system that runs its accounts and payments casually, so this is recurring revenue with extraordinary switching costs.
The rest of the quarter confirmed the operating quality. Adjusted EPS of $1.36 beat the $1.30 estimate, revenue rose 30% year over year to $3.3 billion, pro forma revenue grew 6.5%, the adjusted EBITDA margin expanded 87 basis points to 39.6%, and free cash flow more than doubled to $474 million. A company growing the recurring base, expanding margins, and converting it to cash is executing, and the $13.5 billion acquisition of Global Payments' Issuer Solutions business gives it a larger, scaled card-issuing platform to cross-sell into that same financial-institution client list.
The valuation is the opportunity. At $38 (June 27, 2026) the stock implies only about 4.5% annual operating growth, a low bar for a business compounding its recurring base in the double digits. Every method that fits a profitable, cash-generative software-and-processing company lands above the price: relative valuation at $76, the excess-return methods at $56 to $74, the earnings-power method above $100, and the earnings-yield method at $56. FIS also struck a first-in-financial-services AI agreement with Anthropic, upside not even in guidance. For a buyer who anchors on the recurring Banking metric and the embedded client base, the market is pricing a far gloomier future than the segment data supports.
Bear Case
The qualitative truth that explains the cheap multiple is that FIS is a deal-driven company, and the market has learned to distrust the model. The most visible evidence is recent: FIS sold down the Worldpay payments business it had bought for roughly $43 billion only a few years earlier at a fraction of that value, a textbook case of an expensive acquisition that destroyed shareholder capital. Now the company has spent about $13.5 billion to buy Global Payments' Issuer Solutions business, and an investor is being asked to trust that this deal is different. The discount to every value method is not the market missing value; it is the market pricing the risk that a serial, leveraged acquirer keeps paying up and integrating poorly.
The balance sheet makes that risk concrete. FIS now carries roughly $21 billion of gross debt against a thin equity cushion, and the Issuer Solutions purchase loaded the company with goodwill and intangibles whose fair value, the 10-K notes, requires significant management judgment and periodic impairment testing (accession 0001136893-26-000013). A highly leveraged company whose book value leans on acquired intangibles is exposed on two fronts: rising rates raise the cost of that debt, and any disappointment in the acquired businesses risks the kind of writedown that erases reported equity. Free cash flow doubled in the quarter, but it has been negative on a trailing basis, which is why the cash-flow-yield methods could not even produce a value.
The operating story is not uniformly strong either. While Banking accelerated, the Capital Markets segment softened on macro volatility and lending weakness, with a five-percentage-point license-renewal headwind, and analysts have been trimming their fair-value estimates, cutting price targets toward the high $50s on lower growth and margin assumptions. The implied 4.5% growth that the bull frames as a low bar is also a fair read of a mature processor whose organic growth has historically been mid-single-digit, not the double-digit pace of the acquisition-inflated headline. A leveraged roll-up trading below book-based value can stay cheap for years precisely because the leverage and the deal risk are real, and the Worldpay episode is the reminder that the discount has been earned.
Valuation
Inverting the price shows an undemanding bar. At $38 the market pays about 24x company-wide operating income, which solves to only about 4.5% annual operating-profit growth over a five-year stage. For a business compounding its recurring Banking base in the double digits, that is a low hurdle, and each point of cost of capital moves the implied growth by a large 8.6 points, so the assumption is highly rate-sensitive but currently very modest.
The model X-ray is unusually one-sided toward cheap. Every applicable method lands above the price: relative valuation at $76, the two-stage excess-return method at $74, residual income at $75, the EV/EBITDA comp at $65, the simple excess-return and earnings-yield methods near $56, the Graham number at $60, and the earnings-power method, helped by a low assumed cost of capital, above $100. The discounted-future-market-cap method is the lone read near the price at $34. The cash-flow-yield methods could not be computed because trailing free cash flow is non-positive, a direct consequence of the debt and deal spending.
The resulting band runs from about $36 at the low end to $49 at the base and $115 at the high, with reliability tagged as ok, and today's price sits right at the low end. That placement is the whole story: on profitability and recurring-revenue methods the stock is materially cheap, but the band's low end essentially equals the price, which says the market is applying a deal-and-leverage discount the methods do not capture. The deciding variable is whether the Issuer Solutions integration and the Banking acceleration prove the model has turned, or whether the Worldpay pattern repeats.
Catalysts
Q1 2026, reported in mid-May, was the most recent data point and it beat. Adjusted EPS of $1.36 cleared the $1.30 estimate, revenue rose 30% year over year to $3.3 billion, pro forma revenue grew 6.5%, the adjusted EBITDA margin expanded to 39.6%, and free cash flow more than doubled to $474 million. Banking Solutions led with 45% growth and 24% recurring annual contract value growth, while Capital Markets lagged on macro volatility and a license-renewal headwind. The next print is the test of whether Banking momentum and the integration stay on track.
The Issuer Solutions integration is the multi-year catalyst that decides the thesis. The roughly $13.5 billion acquisition reshapes FIS toward card issuing, and the market is watching for evidence it cross-sells into the bank client base without the value destruction that followed the Worldpay deal. Deleveraging progress against the roughly $21 billion debt load is the other key milestone.
Two forward items add optionality. FIS announced a first-in-financial-services AI partnership with Anthropic, with no revenue from it in 2026 guidance, so any monetization is upside. Sentiment is cautious, with analysts trimming fair-value estimates toward the high $50s on lower growth and margin assumptions, which still sits well above the current price near $38 and frames the debate as value versus deal risk.
Sources: stocktitan.net (Q1 2026 10-Q), gurufocus.com (Q1 2026 highlights), seekingalpha.com (Q1 2026 presentation), simplywall.st (FIS analysis).
Peer Cohorts (Per Segment, With Filing Citations)
Banking Solutions / Capital Market Solutions (reported)
- V (VISA INC.)
- (no filing in the citation store)
- MA (Mastercard Inc)
- (no filing in the citation store)
- PYPL (PayPal Holdings, Inc.)
- (no filing in the citation store)
- GPN (GLOBAL PAYMENTS INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.