Fiserv (FI 1.70%) stock is gaining ground Tuesday following the company's third-quarter earnings release. The company's share price was up 3.8% as of 1:45 p.m. ET, according to data from S&P Global Market Intelligence.
Fiserv published Q3 results before the market opened this morning, delivering sales and earnings for the period that came in ahead of the market's expectations. The fintech specialist posted non-GAAP (adjusted) earnings per share of $1.96 on revenue of $0.87 billion, beating the average analyst estimate's earnings target by $0.03 per share and its sales target by $270 million.
Fiserv posts strong Q3 results
Fiserv's revenue climbed 7.7% year over year in Q2. Meanwhile, earnings per share were up 108% compared to the prior-year period.
Backing out contributions from the sale of the company's reconciliation business and other one-time items, non-GAAP (adjusted) earnings per share were up 20% year over year. Excluding the reconciliation business from the comparison, adjusted sales for this year's third quarter were up 8% to reach $4.62 billion. The company's free cash flow over the first three quarters of the year hit $2.72 billion -- up 29% compared to the same stretch last year.
What comes next for Fiserv stock?
On the heels of its encouraging Q3 performance, Fiserv raised its full-year performance targets. The company now expects organic revenue growth of 11% for the year. Adjusted earnings are projected to come in between $7.47 per share and $7.52 per share -- representing growth between 15% and 16%. Previously, the company had guided for organic revenue growth between 9% and 11% and earnings per share to expand between 14% and 16%.
FI PE Ratio (Forward) data by YCharts. PE Ratio = price-to-earnings ratio. PS Ratio = price-to-sales ratio.
Fiserv is now valued at roughly 15 times this year's expected earnings and approximately 3.8 times expected sales. The company's share price is now up roughly 13% year to date. On the heels of a strong beat-and-raise quarter, there's a good chance Fiserv can continue marching higher.
