Fiserv Stock Dips After CFO Flags Volume Growth Weakness — Analyst Says Selloff ‘Seems Overblown’

Chief Financial Officer Bob Hau said the company expects increased challenges at its payment gateway in the second quarter.

Fiserv (FI) stock was the top decliner in the S&P 500 index on Thursday after its Chief Financial Officer Bob Hau said second-quarter volume growth at its point-of-sales platform, Clover, would remain at similar levels as the first quarter.

Speaking at the J.P. Morgan Global Technology, Media and Communications Conference, Hau said the company expects increased challenges at its payment gateway, which led to a 16.2% fall in its share prices.

“We expect the second quarter to be generally similar to the first quarter in terms of the reported growth rate from a volume standpoint,” Hau said about Clover.

In the first quarter, Fiserv’s volume growth at Clover slowed to 8% from 14% during the fourth quarter.

Hau pointed out several reasons behind the decline, with the previous year being a leap year and a decline at its largest international market, Canada.

According to TheFly, Mizuho lowered the price target for the stock to $200 from $220. The brokerage said Clover's revenue growth of 27% is "still impressive despite only" 8% volume growth.

Baird analysts said that while the lack of Q2 reported volume growth acceleration is "concerning," the stock move "seems overblown."

The brokerage did not see many changes to Fiserv's total financial picture and pointed out that Hau had reiterated the company’s forecast.

“We remain confident in delivering on our goal of $3.5 billion of revenue by the end of the year," Hau said at the conference, noting strong hardware sales and improved activity in the second half.

Retail sentiment on Stocktwits was in the ‘extremely bullish’ (84/100) territory, while retail message volume surged more than 6000%.

One user said the stock is slated for a rebound as the premium is gone.

“Fiserv’s inability to accelerate Clover’s volume growth suggests it may be losing ground to more agile fintech rivals offering better features or pricing,” another user said.

Fiserv stock has fallen 23.1% year to date (YTD).

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