Fiserv: Fallen Valuation Creates Good Buy Opportunity

Fiserv (FISV) just came out with a solid earnings report (Call Transcript). For Q2, the company earned 83 cents a share from continuing ops. That beat the Street's consensus by four cents a share. Revenue rose 38% to $1.30 billion. The company projects full-year EPS at $3.28 to $3.40.

Here's a look at Fiserv's stock (blue line, left scale) and earnings-per-share (gold line, right scale).

The red indicates the company's EPS projection. I've scaled the graph at a ratio of 16-to-1, which is pretty conservative. That means that when the lines cross, the P/E ratio is 16.

You can see how far the company's valuation has fallen even though earnings growth seems to be holding up well. That's as good a definition as any for a good buying opportunity.

Disclosure: None