Trading Post June 15, 2026
Talk about a dog of a stock, now under $48 from $226 early last year. During one of the greatest stock market bull runs of all time.
The current price is a 10-year low, and over the last 18 months, the stock has gapped down more than 3% eight times and more than 10% three times. Today, the stock gapped down about 8%.
I covered this one fairly extensively in The Payments Giants: FEE FI FOUR Umm…. In that article, I provided a bingo sheet. And I concluded thus:
In something like this, buying very cheap is important. This will not soon romance the growth crowd, and the payments space is, as I said at the top, changing enough for a wise investor to be patient with the incumbents. Fiserv is also lacking the catalysts I like to see. Perhaps the best one is a hint of better results from new management that might restore credibility to Fiserv on Wall Street. Probably at least 1-2 years away.
The CEO violation
The CEO left unexpectedly, which is a thesis violation if there ever was one. Thesis violation does not mean sell. It means re-evaluate.
Ex-CEO Mike Lyons joined Fiserv 13 months ago, and the stock has fallen 71% during his tenure. It is a bad look, but the prior CEO before Lyons had set the company up with aggressive accounting and short-term sales tricks that had to be unwound. When Lyons told the story, the stock crashed, and kept crashing.
So, Lyons gets a clean start now as CEO of Truist Bank – which is no slouch and a top ten banking institution (the old SunTrust, merged with BB&T). It is always possible Lyons found Fiserv impossible to turn after he got a deep look at it. That is not, however, a foregone conclusion. Lyons is a long-time investment banker, so Truist may be a more natural fit.
The new CEO seems to have technology expertise in payments that the old one did not. CEO Takis Georgakopoulos comes from the fast-growing Clover side of the business. Clover competes globally in payments by being preferentially bolted onto and into Fiserv's extensive roster of current clients. Takis spent 17 years at JP Morgan, last running JPM's global payments business before joining Fiserv in late 2024. Takis is an inside hire but not part of the old guard.
The business runs fine without a hero CEO
To be clear, the business itself runs just fine no matter who is CEO. Fiserv holds the #1 spot in the 2025 IDC FinTech 100 for the third straight year. It processes 10,000 transactions per second, with 1.8 billion issuer accounts, 339 million deposit and loan accounts, and reaches 95% of U.S. households.
I'll keep going. 3.9 million small businesses, 900,000 Clover merchants, 7,000 enterprise-level clients across almost 1 million locations. One man at the top is not pulling switches to make that happen.
The CEO is there to grow the business with high-ROIC moves and to ensure existing moats are fortified if not expanded. A sudden CEO change after 13 months hits at that part of the thesis.
Fiserv's most significant moat is its core processing business for banks. It has a 99% retention rate. The switching costs are astronomical. It is practically a license to print money, but does not grow much. Last year a pull-back in Argentina's economy knocked the processing business back, and it shrunk 3%. The merchant business and the Clover business are in for some competition, no doubt.
Clover and the competition
Clover (acquired as part of the 2019 First Data buy) is about 30% of Merchant Solutions revenues, and is in the business of POS hardware/software for small and midsize businesses/restaurants. Clover is a competitor to Toast, Shift4, Block, Stripe and has been growing fast, but also by acquisition (four in 2025 alone).
Clover serves 700,000 businesses, 200,000 of which are restaurants. For comparison, Toast is approaching 150,000 restaurants, and Square (Block) is at 4,000,000 businesses. Shift4 was at about 200,000 before Global Blue. Adyen and Stripe also compete, with Adyen in particular known for having a best-in-class user interface. Competition is fierce in this merchant solutions space.
In this case, Fiserv acquires companies for Clover — they are meant to be "tuck-in" or "bolt-on" but still Clover's growth is not entirely organic. Fiserv does not break out organic growth at Clover, which would generally come through Fiserv's extensive network of business relationships – ostensibly at a lower customer acquisition cost and with lower churn. Neither are disclosed.
Fiserv's efficiency plan Project Elevate is a holdover from now two CEOs ago but is run through the CFO Paul Todd, who is not going anywhere. Takis is also involved with the project, so it will continue. I am excited to see what frontier-models can do for efficiency in this business that already has 95% of a market.
FIUSD, the Genius Act, and "flip the switch"
I should mention FIUSD, Fiserv's stablecoin. This is a response to customer requests, and not a third-party crypto token play. What is cool here, after the Genius Act implementation rules pass in July, Fiserv just flips a FIUSD switch and customers can flip between fiat and FIUSD stablecoin without leaving Fiserv.
The StoneCastle acquisition in December is a big part of the moat defense. The idea of course is that customers' accounts are the same whatever the mix is between fiat and stablecoin. This is all a very natural extension because of Fiserv's incredibly wide spread across the entire banking industry.
Lyons misspoke regarding the Clarity Act. Three Genius Act sections — Section 16, Section 10, and Section 4(a)(1)(A)(ii) — grant the "flip the switch" authority, the permission of commingled reserves in an omnibus account, and allowing reserves to be demand deposits, respectively. The Clarity Act has essentially nothing to do with Fiserv's FIUSD. In fact, Section 17 of the Genius Act amended the 1933, 1934, 1940 and Commodity Exchange Acts to make stablecoin, issued by companies such as Fiserv, neither security nor commodity in the eyes of those laws.
Where Lyons misspoke is that the Genius Act Section 13 requires final implementation rules within one year of the Act's enactment. That makes it July 2026. This is when the "flip the switch" authority will be granted. Lyons mentioned waiting for the Clarity Act to pass, but in reality the Genius Act already has set it in motion. This is better for the Fiserv bull thesis than Lyons implied.
The agentic-commerce angle
Ultimately, for those that believe in an agentic commerce future, Fiserv controls both merchant rails and direct deposit accounts in a rather complete way that complements settlement of payments.
If agentic commerce and business use develops in such a manner, Fiserv may not be disintermediated at all but rather reassert its dominance in core banking, come crypto, come fiat, come what may. New CEO Takis has already been working on this with Clover — as Lyons said at the May 28th Bernstein conference, "one big effort that Takis and team are working on is the democratization of Agentic commerce for the 900,000 merchants in Clover."
Fiserv, in terms of competitive advantage, is therefore a step or two above other legacy payment players such as Global Payments (GPN) and Fidelity National (FIS). The stock is selling off on a governance question, but this is a Castle tier business. Castle is the second strongest AI and Competitive Threat (AICT) Tier in my Software & Payments system.
I have no reason to believe the new CEO is anything but competent for the role. I have to believe the Board knows the situation and moved in a manner that would improve the business prospects. Late in 2025, after the first big drop, 3 insiders including one Board member bought decent amounts of the shares in the low $60s.
The numbers
I believe this is a resilient business that has stumbled badly after years of catering to what Wall Street wants to see more than what was really fundamentally good for the business long-term. I still believe the tricky years are behind it, and I find Fiserv's IV15 is stable at $35.
The company just affirmed earnings per share a little over $8 per share for 2026. If that happens, that will be the highest-ever earnings per share for FISV by almost $2 per share. That performance is not part of the narrative.
What is the narrative? The stock tells the tale, but so do its analysts. The sell ratings grow the farther the stock falls, as do the buy ratings. Not a cheery consensus. The cheery consensus was up there at $226 per share.
The stock's fall today leaves the current price at 1.4× my IV15 – on the edge of the fat pitch zone given its competitive position as a Castle.
Until Next Time!