What's in the Cards for Fidelity National (FIS) in Q2 Earnings?

Fidelity National Information Services, Inc. FIS is slated to report second-quarter 2023 results on Aug 2, before the opening bell.

Q2 Estimates

The Zacks Consensus Estimate for Fidelity National’s second-quarter earnings per share is pegged at $1.48, which indicates a decline of 14.5% from the prior-year quarter’s reported figure.

The consensus mark for revenues stands at $3.7 billion, suggesting a 0.5% fall from the year-ago quarter’s reported number.

Earnings Surprise History

Fidelity National has a decent earnings surprise history. Its bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 2.3%. This is depicted in the chart below:

Fidelity National Information Services, Inc. Price and EPS Surprise

Fidelity National Information Services, Inc. Price and EPS Surprise

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

What Our Quantitative Model Unveils

Our proven model predicts an earnings beat for Fidelity National this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

Earnings ESP: Fidelity National has an Earnings ESP of +0.05% because the Most Accurate Estimate of $1.48 aligns with the Zacks Consensus Estimate. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: FIS carries a Zacks Rank of 3.

Factors to Note

Growing contributions from its Banking Solutions and Capital Markets segments are expected to have fueled FIS’s top-line growth. Elevated transaction and account growth due to volatility in the banking sector are likely to have driven recurring revenue growth in the Banking segment. The company estimates organic growth to be in the range of 0-2% for the segment. We expect Banking Solution’s second-quarter revenues to grow 0.1% year over year to $1.7 billion.

In the second quarter, the Capital Market Solutions unit of Fidelity National is expected to have benefited on the back of growing sales volume and transition to SaaS-based engagements. The company estimates organic growth to be in the range of 4-6% for the unit. We expect Capital Market’s second-quarter revenues to grow 3.8% year over year to $655.9 million.

Lower-margin revenue mix and cost inflation might have acted as a common drag on the segments’ quarterly performance. Moreover, the negative macroeconomic impact is likely to have affected Merchant Solution’s performance in the second quarter. We expect Merchant Solutions’ revenues to decline 0.9% year over year to $1.3 billion.

Prudent investments in innovative technologies and an enhanced digital solutions suite are likely to have boosted operational efficiencies and expanded the customer base for Fidelity National in the second quarter. However, such technology upgrades escalate the expense level, which might have eroded its margins.

Other Stocks to Consider

Here are some other companies from the Business Services space, which according to our model, have the right combination of elements to beat on earnings this time around:

Lightspeed Commerce Inc. LSPD has an Earnings ESP of +7.41% and a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LSPD’s second-quarter 2023 earnings is pegged at a loss of 5 cents per share, which indicates an increase of 58.3% from the prior-year quarter’s reported number.

Lightspeed Commerce’s earnings beat estimates in three of the trailing four quarters and met once, the average surprise being 59.4%.

Integral Ad Science Holding Corp. IAS has an Earnings ESP of +55.56% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for IAS’s second-quarter 2023 earnings stands at 3 cents per share, indicating a two-fold rise from the prior-year quarter’s reported figure.

Integral Ad Science’s earnings beat estimates in three of the trailing four quarters and matched the mark once, the average negative surprise being 200%.

Booz Allen Hamilton Holding Corporation BAH has an Earnings ESP of +3.20% and a Zacks Rank of 2, currently. The Zacks Consensus Estimate for BAH’s second-quarter 2023 earnings is pegged at $1.25 per share, hinting toward a 10.6% improvement from the prior-year quarter’s reported figure.

Booz Allen Hamilton’s bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 10.2%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report

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Integral Ad Science Holding Corp. (IAS) : Free Stock Analysis Report

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