Fidelity's (FIS) Worldpay to Provide Omnichannel Solutions to HMV
Fidelity National Information Services, Inc. FIS recently announced that its Worldpay business inked a deal to expand its partnership with HMV. FIS will aid HMV, a British entertainment and music merchant, to expand its footprint in Europe with its omnichannel solutions.
Worldpay and FreedomPay have jointly developed an omnichannel strategy, Worldpay Omnichannel, which will allow merchants to traverse boundaries and serve customers with their preferred payment methods. The Next Level Retail Report, by FreedomPay and Worldpay, highlights that in the past 12 months, almost half of the customers have used three plus shopping channels to buy something. The changing landscape of customer preferences makes an omnichannel strategy inevitable for merchants. The demand for Worldpay’s services should further boost FIS earnings in the future.
Fidelity also partnered with Alchemy Pay on Dec 19, 2023, improving efficiency and enhancing customer experience throughout the buying and selling process of cryptocurrency. WorldPay would allow access to its Mastercard and Visa payment rails to Alchemy. This move bodes well for FIS as it aims to bridge the gap between traditional and digital assets, being optimistic about the rise of cryptocurrency adoption in the future.
A bold move highlighting FIS’s foresight was the divestment of a majority stake in its Worldpay Merchant Solutions to GTCR, which is expected to close by the first quarter of 2024. Partnerships with merchants should boost Worldpay’s business, positively impacting FIS’s results. Fidelity is expected to report earnings from its Worldpay business as income from a minority interest in its income statement. The company is likely to gain from the equity stake in Worldpay, along with cash influx from its majority stake sale, acting as a win-win situation for Fidelity.
Price Performance
Shares of Fidelity have gained 11.7% in the past six months compared with the 11.6% rise of the industry.
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Zacks Rank & Key Picks
Fidelity currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Business Services space are FirstCash Holdings, Inc. FCFS, Shift4 Payments, Inc. FOUR and RB Global, Inc. RBA. While FirstCash and Shift4 Payments currently sport a Zacks Rank #1 (Strong Buy), RB Global carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FirstCash’s current-year bottom line indicates 13.1% year-over-year growth. Headquartered in Fort Worth, TX, FCFS beat earnings estimates in all the past four quarters, with an average surprise of 7.9%.
The Zacks Consensus Estimate for Shift4 Payments’ current-year earnings is pegged at $2.92 per share, which indicates 110.1% year-over-year growth. Allentown, PA-based FOUR beat earnings estimates in all the past four quarters, with an average surprise of 25%.
The Zacks Consensus Estimate for RB Global’s current-year bottom line suggests 15.4% year-over-year growth. Based in Westchester, IL, RBA beat earnings estimates in each of the past four quarters, with an average surprise of 18.9%.
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