Is Fiserv an Underrated Financial Stock Investment Play?

Fiserv (NASDAQ: FISV) has been one of the worst-performing fintech stocks during the past year. It's down by more than 70% during that stretch. Growth has slowed, but the company continues to gain ground as a popular merchant service provider.

The stock's growth days seem to be over, but a price-to-earnings (P/E) ratio of 9 warrants some attention. These are some of the things investors should keep in mind before buying Fiserv stock.

Low growth numbers aren't bad at the current valuation

Image source: Getty Images.

Fiserv didn't post exceptional results in Q4, but they weren't terrible, either. Revenue inched up by 1% year over year in Q4, with full-year revenue up by 4% year over year. These small numbers are projected to continue in 2026, with company projections suggesting 1%-3% revenue growth during that year.

The fintech company also expects earnings per share (EPS) to range from $8 to $8.30 per share in 2026. That's a drop from the $8.64 per share Fiserv reported for 2025.

The Q4 results and 2026 forecast would be more concerning if Fiserv had a sky-high valuation, but that isn't the case. Granted, a business with barely any revenue growth and a lower EPS forecast shouldn't be expected to rally significantly. Any positive changes to the company's outlook and the underlying business could send the stock soaring, but a pleasant surprise like that seems remote at the moment.

Fiserv's two business segments aren't growing

Fiserv uses two business segments on its consolidated statements of income: "processing and services" and "product." Neither of these segments delivered any meaningful growth in Q4, and based on company projections, they won't deliver much growth in 2026, either.

Processing and services revenue was little changed in Q4, which was worse than its 1.5% year-over-year total revenue growth. A similar story unfolds for the product category, which was up by 3.6% year over year in Q4 compared to a 13% growth rate for the entire year. That's a sharp deceleration, which suggests a recovery is unlikely, especially an immediate reversal.

And expenses are accelerating. Fiserv posted a 5.4% year-over-year increase in costs throughout 2025. Meanwhile, its Q4 2025 costs jumped by 11.4% from a year earlier.

The final verdict

This trend of lower revenue growth and higher costs is already set to continue in 2026. That's not the winning formula for any stock. It suggests that Fiserv will continue to underperform the S&P 500 over the long haul.

A P/E ratio of 9 suggests that the worst is already over. Fiserv doesn't have much room to fall, but that doesn't necessarily make it a stock to hold over the long run. You can put your money into any number of other long-term stocks with attractive fundamentals and solid valuations. If you don't want the complexity of tracking individual picks, you can just put your money into an S&P 500 exchange-traded fund (ETF) that will likely outperform Fiserv.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.