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Fidelity National (FIS) to Post Q2 Earnings: A Beat in Store?

Zacks Equity Research
·3 min read

Fidelity National Information Services FIS is scheduled to release second-quarter 2020 earnings on Aug 4, before the bell. The company’s sales are anticipated to reflect year-over-year growth, while earnings might display a decline.

Notably, Fidelity delivered positive earnings surprises in three of the trailing four quarters and in-line numbers in the other, the average beat being 2.17%.

In the last reported quarter, the company’s results surpassed the Zacks Consensus Estimate. Organic revenue growth and expanding margin were key tailwinds. However, significant rise in expenses was a deterrent.

 

Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise

Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise

Fidelity National Information Services, Inc. price-consensus-eps-surprise-chart | Fidelity National Information Services, Inc. Quote

Key Factors

Fidelity is likely to display a strong revenue-growth performance for the April-June quarter as underlying business trends were robust. Notably, overall revenues of $2.9 billion are projected to climb 35.1% from the prior-year quarter.

This Florida-based financial service provider’s bottom-line results might disappoint on fall in interest rates due to the coronavirus mayhem.

The company’s focus on rolling out innovative products in order to meet customers’ rising demand might have inflated expenses.

Fidelity’s shares have gained 17% in the three-month period ended Jun 30, 2020, compared with the industry’s growth of 27%.

Will the upcoming earnings release give a boost to Fidelity’s stock? That depends largely on whether or not the firm is able to impress the market with its second-quarter results.

Here is what our quantitative model predicts:

Fidelity has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Fidelity is +4.87%.

Zacks Rank: Fidelity currently carries a Zacks Rank of 3, which increases the predictive power of ESP.

Notably, the Zacks Consensus Estimate for the second-quarter earnings suggests a 39.3% plunge on a year-over-year basis.

Stocks That Warrant a Look

Old Second Bancorp, Inc. OSBC has been witnessing upward estimate revisions, for the past 30 days. Moreover, this Zacks #2 Ranked (Buy) stock has gained more than 7%, in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GAIN Capital Holdings, Inc. GCAP has been recording upward estimate revisions, for the past 30 days. Also, the company’s shares have lost 3.4% in three months’ time. At present, it carries a Zacks Rank of 2.

Lakeland Financial Corporation LKFN has been witnessing stable estimates for the past 30 days. Additionally, the stock has rallied 11% over the past three months. It currently carries a Zacks Rank #2.

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Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
 
Old Second Bancorp, Inc. (OSBC) : Free Stock Analysis Report
 
Lakeland Financial Corporation (LKFN) : Free Stock Analysis Report
 
GAIN Capital Holdings, Inc. (GCAP) : Free Stock Analysis Report
 
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Zacks Investment Research