# FIS (FIS)

Sector: Financial technology

| Field | Value |
|---|---|
| Price | $36.13 |
| Fair value (Analysts) | $77.00 |
| Discount to fair value | 53.1% |
| Fair value uncertainty (Analysts) | Medium |
| Economic moat (Analysts) | Narrow |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.39 |
| Data as of | 2026-10-16 |
| Next earnings | 2026-11-04 (estimate) |

## In short

The market doubts that FIS can grow faster with the debt it took on to buy TSYS, so steady five percent growth and falling debt must come over the next four to six quarters for the gap to close.

## Themes and gap

- Themes: High debt (leverage), Interest rates (interest-rates)
- Gap type: Can close (closable)
- Why: Quarterly growth and debt reduction, and the 2027 outlook in February 2027, show within about two years whether the TSYS deal works.

## About

FIS sells software and processing services to banks, capital markets firms and other businesses. Banking Solutions runs core banking systems, digital banking, payments and card processing for banks of all sizes. On January 9, 2026, FIS bought the Issuer Solutions business (TSYS) from Global Payments for an enterprise value of $13.5 billion, paid with its 45% stake in Worldpay and about $7.7 billion in cash. TSYS provides card issuing technology and processing to banks and is now part of Banking Solutions under the name Total Issuing Solutions. Capital Market Solutions sells software for trading, investment operations and fund administration. Most revenue is recurring. FIS expects 2026 revenue of $13.63 billion to $13.70 billion.

## Thesis

FIS trades at a discount because the market doubts that it can grow faster with a much larger debt load after the TSYS purchase. Debt rose to $21.2 billion at June 30, 2026, from about $13.1 billion at the end of 2025, and FIS stopped most share buybacks and small acquisitions until gross leverage falls to about 2.8 times. On August 4, 2026, FIS cut its 2026 pro forma revenue growth outlook to 4.5% to 5.0% from 5.1% to 5.7%, and its pro forma adjusted EBITDA growth outlook to 5.9% to 6.9% from 7.2% to 8.4%. The stock fell about 5% at the open that day and kept falling in September. For the gap to close, pro forma revenue must keep growing at about 5% or faster, TSYS must keep its higher margins, free cash flow must reach the $2.15 billion to $2.25 billion target for 2026, and debt must fall so that buybacks can start again. The first test is the Q3 2026 report, expected on about November 4, 2026, against the outlook of adjusted EPS of $1.58 to $1.62. The 2027 outlook in February 2027 will show whether growth holds after the first year with TSYS. If FIS meets these targets and reaches its leverage goal, the gap can close over the next four to six quarters. The main risk is that banks delay technology spending or that TSYS loses large card clients.

## Checkpoints

- Nov 4, 2026 (estimate): Q3 2026 results: pro forma growth and cash flow. Status: Pending. Watch: Adjusted EPS inside the $1.58 to $1.62 outlook, pro forma revenue growth near 5% and the free cash flow target kept pass; another cut to the growth outlook fails.
- Feb 2027 (estimate): Full-year 2026 results and 2027 outlook. Status: Pending. Watch: A 2027 outlook with organic revenue growth of 5% or more, lower debt and a date to restart buybacks passes; slower growth or leverage that does not fall fails.

## Balance sheet

- Cash: $744M
- Debt: $21.2B
- Net debt: $20.4B
- Interest cover: 2.3×
- Undrawn credit line: $2.6B, to September 2029
- Debt due within 12 months: $5.7B

At June 30, 2026, FIS had $744 million of cash and $21.2 billion of debt: $16.9 billion of long-term debt, including the current portion, and $4.2 billion of short-term borrowings, mostly US commercial paper at about 4.0%. In March 2026, FIS sold about $6.3 billion of new USD senior notes due 2028, 2029 and 2031 and $500 million of floating rate notes due 2029 to fund the TSYS purchase, and it repaid $1.25 billion of notes on March 1, 2026. Debt was about $13.1 billion at December 31, 2025. Interest cover is operating income divided by net interest expense for the first half of 2026. Available liquidity was $3.4 billion, including $2.6 billion of revolving credit capacity. The main revolving facility runs to September 2029, and a $1.0 billion incremental facility runs to June 2027. FIS targets gross leverage of about 2.8 times before it starts large buybacks again. In Q2 2026, it paid $228 million of dividends and bought back $42 million of shares.

As of 2026-06-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/1136893/000113689326000050/fis-20260630.htm
- https://www.sec.gov/Archives/edgar/data/1136893/000113689326000046/q22026ex991.htm

## Recent events

- 2026-08-05: RBC lowered its price target on FIS to $53.
- 2026-08-04: FIS reported Q2 2026 results. Revenue rose 29% to $3.4 billion with TSYS, and pro forma revenue grew 5.3%. GAAP EPS was $0.45, and adjusted EPS rose 8.8% to $1.48. Free cash flow was $525 million. FIS cut its 2026 pro forma revenue growth outlook to 4.5% to 5.0% and raised its free cash flow target by $100 million to $2.15 billion to $2.25 billion. The stock opened about 5% lower.
- 2026-06-16: The Chief Legal and Corporate Affairs Officer, Caroline Tsai, agreed to step down on July 1, 2026. Chip Keller, the Chief Compliance Officer, became Chief Legal Officer.
- 2026-05-08: FIS reported Q1 2026 results. GAAP EPS was $4.58, mostly from the $2.2 billion gain on the sale of its Worldpay stake. Adjusted EPS rose 12% to $1.36, and pro forma revenue grew 6.5%. FIS kept its 2026 outlook.

## Risks

- High: Debt was $21.2 billion at June 30, 2026, after the TSYS purchase. About $4.1 billion is US commercial paper at variable rates, so higher short-term rates raise interest cost. FIS paused most buybacks and small acquisitions until gross leverage falls to about 2.8 times.
- High: Growth slowed. FIS cut its 2026 pro forma revenue growth outlook to 4.5% to 5.0% in August 2026. If banks delay projects or if card volumes slow, revenue can grow more slowly again.
- Medium: FIS must combine TSYS with its own business. Global Payments still provides some services to FIS under transition agreements. Problems in the move of systems, or the loss of large card issuers, can lower revenue and margins.
- Medium: Bank technology is competitive, and new software and AI tools can change how banks buy core and card systems. Bank mergers also reduce the number of clients and can move contracts to competitors.
- Low: FIS still guarantees some obligations of Worldpay, its former business, including a liability of $378 million due on October 12, 2027.

## Links

- Page: https://picks.kamadorueda.com/company/FIS/
- History of changes: https://picks.kamadorueda.com/company/FIS/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/FIS.json

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