Fiserv shares took a dive this week, despite the firm beating analysts' expectations for its third quarter results, after it revealed that it has lost a "large processing client", understood to be Stripe.
Shares in Fiserv fell around 10% on Wednesday and have failed to recover during the week after the company told analysts during a conference call that it has lost a client through one of its joint ventures, hitting around five per cent of North American processing volumes.
The client, not named by Fiserv, has been identified by Mizuho Securities analyst Dan Dolev as Stripe.
Dolev maintained a buy rating for Fiserv but noted, according to Nasdaq: “Nevertheless, we worry that the slowdown in e-comm volumes, which we estimate was due to Stripe going in-house (vs. via the WFC JV) may weigh on sentiment. We note that while volume impact is more meaningful, the actual drag on revenue is marginal amid low take rates for that revenue stream.”
While the news may have hit Fiserv's price, analysts remain optimistic about the stock, with a strong buy consensus rating, says Nasdaq.
For the quarter, Fiserv posted adjusted earnings per share of $1.47, above the Street’s expectations of $1.45 and the $1.20 reported for the same period the previous year.