Fiserv Inc. (NASDAQ:FISV)

The financial ratios over the analyzed quarterly periods exhibit several notable trends and fluctuations.

Price to earnings (P/E) ratio

The P/E ratio data begins from March 31, 2017, showing a declining trend from 23.57 to a low near 19.88-20.84 during mid-2017 and late 2017. Subsequently, it rises steadily reaching a peak value at the end of 2019 and early 2020, with values nearing 80 to 94.59, indicating a significant increase in market valuation relative to earnings during this period. This peak is followed by a declining pattern from 2021 onwards, dropping to a more moderate range of around 39.85 by March 31, 2022. The observed volatility in P/E ratio suggests fluctuating investor sentiment and earnings performance throughout the years, with a pronounced stretch of market premium in late 2019 and 2020.

Price to operating profit (P/OP) ratio

The P/OP ratio reflects a somewhat similar pattern as the P/E ratio, with initial values around the mid to high teens during early periods (approximately 15.92 to 19.17). A significant rise occurs as it approaches late 2019 and early 2020, reaching a high near 47.73. After this peak, the ratio decreases steadily through 2021 and into early 2022, settling near 25.46. This trend indicates an increased investor valuation relative to operating profit that peaked during late 2019 and 2020, followed by normalization thereafter.

Price to sales (P/S) ratio

The P/S ratio maintains a generally lower range compared to P/E and P/OP ratios. It starts around 5.16 early in 2017, with minor fluctuations, then spikes to a high of 9.69 at the end of 2019. Subsequently, it declines sharply through 2020 and 2021, moving down to approximately 3.84 by early 2022, indicating a reduced market valuation relative to sales after the 2019 peak. This suggests changes in sales growth or market valuation dynamics influencing investor perception during these periods.

Price to book value (P/BV) ratio

The P/BV ratio shows considerable variation over the examined period. The earliest data points (2017-2018) demonstrate a ratio in double digits ranging roughly from 9.51 to 14.47. A substantial decline occurs starting late 2019 when the ratio drops precipitously to near 2.20 and remains in this lower range through 2022, fluctuating slightly around 2.0 to 2.58. This sharp decrease suggests notable changes in the company's book value or market price behavior, potentially influenced by accounting adjustments, asset revaluations, or shifts in investor confidence impacting equity valuation.

Overall, the ratios indicate a pronounced peak in market valuations relative to earnings, operating profit, and sales during late 2019 and early 2020, followed by a reversion to more moderate levels through 2021 into early 2022. The price to book value ratio's sharp decline since late 2019 contrasts with the other ratios’ trends and may reflect specific balance sheet adjustments or market perceptions affecting equity valuation. These patterns highlight periods of heightened market optimism and subsequent normalization in investor valuation measures over the analyzed timeframe.

Share Price Trend

The share price demonstrated an overall upward trajectory from the first quarter of 2017 through early 2020, moving from approximately $60 to a peak exceeding $110 in late 2019. Notably, the price reached its highest point of $115.37 in the last quarter of 2020, followed by a period of volatility. The pricing declined during much of 2021 but showed signs of recovery by the first quarter of 2022, closing near $104.74.

Earnings Per Share (EPS) Pattern

EPS exhibited growth from around Q1 2018, starting at $3.02 and peaking at $3.63 in late 2017 (note the initial available data is from Q1 2018). However, from 2019 onwards, EPS declined significantly, dropping to approximately $1.31 in mid-2020. Subsequently, there was a gradual recovery through 2021 and into the first quarter of 2022, with EPS rising to $2.63.

Price-to-Earnings (P/E) Ratio Movements

The P/E ratio inversely mirrored EPS trends over the observed timeframe. Initially, P/E was relatively moderate, ranging in the 20s through mid-2018. However, from 2019 to mid-2020, P/E escalated sharply, reaching unusually high levels above 80, peaking near 95 in late 2020. This spike corresponds with a substantial reduction in EPS while the share price remained relatively stable. Post-peak, the P/E ratio declined steadily during 2021 and into early 2022, settling near 40 by Q1 2022.

Summary of Relationships and Insights

The data reflects a period of earnings contraction beginning around 2019, which caused substantial spikes in the P/E ratio due to declining EPS against relatively stable or only modestly reduced stock prices. The recovery in EPS during 2021 contributed to a normalization of the P/E ratio, though it remained elevated compared to earlier years. The share price's initial growth phase aligns with improving EPS and a stable P/E ratio, while later volatility in the share price appears linked to fluctuations in earnings performance. The market may have priced in expectations of future growth or industry conditions during periods of high P/E.

The share price exhibited a general upward trend from March 2017 through June 2019, increasing from $59.95 to a peak around $109.65. This period is characterized by a steady increase in valuation. However, subsequent quarters showed more volatility and some decline, particularly noticeable from the first quarter of 2020 through the end of 2021. Notably, a sharp drop occurred in the third quarter of 2020, followed by a recovery and fluctuations reaching $123.42 in the first quarter of 2021, then tapering down to $95.56 by the end of 2021 before a slight increase to $104.74 in the first quarter of 2022.

Operating profit per share data begins in the first quarter of 2018 and primarily remained within a range of approximately $2.3 to $4.5 over the period through March 2022. There is an observable dip in operating profit per share in the last quarters of 2019 and early 2020, followed by a gradual recovery throughout 2021. The highest operating profit per share levels occurred in early 2018, then again in late 2021 and into 2022, suggesting some cyclical profitability trends.

The price-to-operating-profit (P/OP) ratio demonstrates considerable variability, reflecting fluctuations in market valuation relative to operating profitability. This ratio was lower and more stable around 15.92 to 19.17 during early 2018, indicating a relatively balanced market confidence in earnings. However, beginning in late 2019 and throughout 2020, the ratio surged sharply to peaks above 45, signaling a period where the share price remained elevated despite lower operating profit per share, or alternatively where earnings sharply contracted. The elevated P/OP ratios declined in 2021, returning closer to the 25–35 range, suggesting a normalization of the relationship between share price and operating profitability.

Overall, the data suggest that while share prices experienced growth and peaks coinciding with certain periods of stronger operating profit per share, significant volatility in price and operating profit, particularly around 2019–2020, led to elevated valuation multiples. More recently, there appears to be a trend towards stabilization of both profit metrics and valuation ratios, albeit with some ongoing fluctuations.

Share Price Trends

The share price exhibited an overall upward trajectory from March 31, 2017, starting at $59.95 and reaching a peak near $123.42 by March 31, 2021. Throughout this period, there were fluctuations, including noticeable corrections such as the decline from $115.37 in December 2020 to $95.56 by December 2021. Despite these decreases, the price rebounded slightly to $104.74 by March 31, 2022.

Sales per Share Dynamics

Sales per share data begins from March 31, 2018, at $13.78 and displays a steady growth trend, increasing to $25.69 by March 31, 2022. This represents a sustained increase over the four-year period, indicating consistent improvement in sales efficiency or revenue generation per share. Notably, there is a drop to $11.31 in December 2019; however, this appears to be an anomaly or data irregularity before resuming growth.

Price to Sales Ratio (P/S Ratio) Analysis

The P/S ratio shows considerable volatility across the observed timeframe. Initially recorded at 5.16 in March 2018, it rises to a high of 9.69 in December 2019, which may indicate market optimism or increasing valuation relative to sales at that time. Subsequently, the ratio declines steadily to values around 3.84 in December 2021 before a minor uptick to 4.08 in March 2022. This downward trend in P/S ratio, concurrent with rising sales per share, suggests that market valuation relative to sales became more conservative in later periods.

Interrelationship of Metrics

The increases in sales per share combined with a moderating P/S ratio imply improving fundamental performance alongside more cautious market valuation. The fluctuations in share price partially mirror these trends but are influenced by additional factors beyond these two metrics, as seen in the sharper share price fluctuations relative to steadier sales growth and P/S movements.

The share price exhibited an overall upward trajectory from March 2017 through June 2019, rising from $59.95 to a peak of $109.65, with some fluctuations along the way. After reaching this peak, the share price showed some volatility, declining to approximately $93.52 by September 2020 before recovering and peaking again at $123.42 by March 2021. Following this peak, a general downward trend was observed throughout the remainder of 2021 and into early 2022, with the share price falling to $104.74 by March 2022.

The book value per share (BVPS) reflected a steady increase from March 2017 at $5.71 to a substantial rise beginning in June 2019, reaching approximately $48.56 by December 2019. This substantial jump contrasts with the relatively stable and moderate BVPS values reported before June 2019. Following this increase, BVPS remained relatively stable with minor fluctuations, generally maintaining values around $47 to $48 through to March 2022.

The price-to-book value ratio (P/BV) displayed notable changes over the periods analyzed. Initially, the ratio ranged between approximately 9.5 and 11.2 from early 2017 to the end of 2018, demonstrating market valuations moderately higher than book value. However, a drastic decline occurred between June and September 2019, with the P/BV ratio falling sharply from around 15.79 to approximately 2.28, corresponding with the significant increase in book value per share noted during the same period. From late 2019 onward, the P/BV ratio remained significantly lower, fluctuating narrowly between 1.98 and 2.58 through March 2022.

Overall, the data indicate a considerable restructuring or revaluation around mid-2019, marked by a substantial increase in book value and corresponding drop in the price-to-book ratio, while the company’s share price experienced fluctuations aligned with these changes. Post-2019, the market valued the company closer to its book value than in prior years, suggesting a shift in investor perceptions or valuation approaches.