Fiserv, Inc. (FISV) shares jumped 2.99% Tuesday after the business services giant announced better-than-expected quarterly results.
The company posted a second quarter (Q2) adjusted profit of $1.37 per share, trouncing analysts' earnings per share (EPS) expectation of $1.28. Moreover, the bottom line grew 47.3% from a year earlier. Revenues improved 18% year over year for the reported quarter, largely driven by 41% growth in the company's Acceptance segment. This division provides a range of products and services to merchants, such as point-of-sale (POS), merchant e-commerce services, mobile payment services, cloud solutions, and fraud protection products.
Management also raised the lower end of the company's full-year guidance. It now expects 2021 sales growth of between 10% and 12%, up from a previous forecast range of 9% to 12%. On the earnings front, Fiserv now anticipates generating a profit of $5.50 to $5.60 per share, up from its prior estimate of $5.35 to $5.50.
- Fiserv topped Q2 earnings and revenue expectations and raised its full-year 2021 guidance.
- Fiserv shares broke above the neckline of a double bottom pattern and closed above the 200-day simple moving average in a move that could drive further short-term buying pressure.
- Shares of competitor Fidelity National recently flipped resistance into support, which could lead to a new multi-year high.
As of July 28, 2021, Fiserv stock has a market value of $75.9 billion and is trading 13.38% higher over the past year. However, the shares are trading flat year to date and have declined around 6% over the past three months, providing a laggard trading opportunity after the information service provider's positive earnings.
Fiserv shares broke above the neckline of a double bottom pattern and closed above the closely watched 200-day simple moving average (SMA) Tuesday in a move that could drive further short-term buying pressure. The gains also occurred on heavy volume, indicating conviction from the bulls. Active traders who open a long position here should think about banking profits near key resistance at $125. Manage risk by placing a stop-loss order somewhere under the 200-day SMA, and consider amending it to the breakeven point if the price climbs above intermediate resistance at $116.
A double bottom describes a change in trend and a momentum reversal from prior leading price action. It describes the drop of a stock or index, a rebound, another drop to the same or similar level as the original drop, and finally another rebound.
As a result of the company's upbeat outlook, rival Fidelity National Information Services, Inc. (FIS) also added gains in Tuesday's session ahead of its Q2 earnings, scheduled for release on Aug. 3. Below, we take a more detailed look at Fidelity National stock and turn to the chart to identify significant trading levels to watch.
Fidelity National Information Services, Inc. (FIS)
Fidelity National Information Services provides technology solutions for merchants, banks, and businesses globally. Wall Street expects the Jacksonville, Florida-based company to post adjusted earnings of $1.55 per share, indicating bottom-line growth of 34.8% from the year-ago reported figure of $1.15 per share. Investors should watch for a positive earnings surprise, given the company has either met or exceeded analysts' bottom-line forecasts over the past 22 consecutive quarters. Trading at $150.86 and offering investors a modest 1.05% dividend yield, the stock has added 6.64% on the year but shed 1.28% over the past three months as of July 28, 2021.
Fidelity National shares recently flipped a downtrend line from resistance into support, giving the bulls confidence to make another attempt at taking out multi-year highs at the $155 level. Those who buy here should consider booking profits by trailing a stop under each higher swing low. To use this exit strategy, start by placing an initial stop under the June 30 low and raise it beneath each higher trough as the price rises. Think about moving the stop order to the breakeven point if the stock closes at a new all-time high.
A swing low refers to the troughs reached by a security's price or an indicator during a given period of time, usually fewer than 20 trading periods. A swing low forms when a low is lower than any other surrounding prices in a given period of time.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.