Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
Fiserv Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The Market Value Added (MVA) trajectory reflects a period of significant expansion and capitalization between 2017 and 2020, followed by a contraction in 2021. A transformational shift in the financial structure occurred in 2019, characterized by a simultaneous surge in market valuation and invested capital.
- Market Value Evolution
- Market value experienced moderate growth between 2017 and 2018, followed by a substantial increase in 2019, rising from 39,574 million to 99,314 million. This upward trend peaked in 2020 at 102,075 million before retreating to 86,655 million by the end of 2021.
- Invested Capital Dynamics
- Invested capital remained relatively stable from 2017 to 2018 but underwent a dramatic escalation in 2019, increasing from 9,909 million to 62,514 million. This represents a significant infusion of capital or acquisition activity. Following this surge, the invested capital entered a period of marginal decline, ending at 59,700 million in 2021.
- Market Value Added (MVA) Performance
- MVA exhibited a consistent upward trend from 2017 through 2020, climbing from 25,537 million to a peak of 41,910 million. The fact that MVA continued to rise in 2019 and 2020, despite the massive increase in invested capital, indicates that the market viewed the expansion as value-generative. However, a sharp decline occurred in 2021, with MVA falling to 26,955 million, primarily driven by the reduction in total market value.
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MVA Spread Ratio
Fiserv Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 26,955) | 41,910) | 36,800) | 29,665) | 25,537) | |
| Invested capital2 | 59,700) | 60,165) | 62,514) | 9,909) | 9,201) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 45.15% | 69.66% | 58.87% | 299.38% | 277.55% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Accenture PLC | 739.74% | — | — | — | — | |
| Adobe Inc. | 1,033.13% | 1,082.99% | — | — | — | |
| AppLovin Corp. | 260.37% | — | — | — | — | |
| Cadence Design Systems Inc. | 1,110.87% | — | — | — | — | |
| Datadog Inc. | 5,219.74% | — | — | — | — | |
| International Business Machines Corp. | 55.46% | — | — | — | — | |
| Intuit Inc. | 1,175.12% | — | — | — | — | |
| Microsoft Corp. | 1,383.21% | — | — | — | — | |
| Oracle Corp. | 260.27% | — | — | — | — | |
| Palantir Technologies Inc. | 829.78% | — | — | — | — | |
| Palo Alto Networks Inc. | 573.51% | — | — | — | — | |
| Salesforce Inc. | 270.75% | — | — | — | — | |
| ServiceNow Inc. | 1,798.18% | — | — | — | — | |
| Synopsys Inc. | 707.79% | 468.10% | — | — | — | |
| Workday Inc. | 908.31% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2021 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 26,955 ÷ 59,700 = 45.15%
4 Click competitor name to see calculations.
Between 2017 and 2021, the financial metrics exhibit a significant structural shift in the capital base and a corresponding impact on the efficiency of market value creation.
- Market Value Added (MVA)
- A consistent upward trajectory was observed from 2017 to 2020, with values rising from 25,537 million to a peak of 41,910 million. This growth indicates a period of increasing market valuation relative to the capital invested in the business. However, a sharp contraction occurred in 2021, where MVA decreased to 26,955 million, erasing much of the gains achieved over the preceding four years.
- Invested Capital
- The capital structure underwent a fundamental transformation in 2019. After remaining relatively stable between 2017 and 2018 at 9,201 million and 9,909 million respectively, invested capital surged to 62,514 million in 2019. This represents a massive expansion of the capital base, which remained elevated through 2021, closing the period at 59,700 million.
- MVA Spread Ratio
- The MVA spread ratio demonstrates a strong inverse correlation with the increase in invested capital. The ratio reached a peak of 299.38% in 2018, indicating a high premium of market value over invested capital. Following the capital surge in 2019, the ratio plummeted to 58.87%. Despite a modest recovery to 69.66% in 2020, the ratio declined further to 45.15% by 2021. This overall downward trend suggests that the increase in invested capital was not matched by a proportional increase in market value, leading to a significant reduction in the value-creation efficiency relative to the capital employed.
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MVA Margin
Fiserv Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 26,955) | 41,910) | 36,800) | 29,665) | 25,537) | |
| Revenue | 16,226) | 14,852) | 10,187) | 5,823) | 5,696) | |
| Add: Increase (decrease) in contract liabilities | 77) | 86) | 178) | (161) | 69) | |
| Adjusted revenue | 16,303) | 14,938) | 10,365) | 5,662) | 5,765) | |
| Performance Ratio | ||||||
| MVA margin2 | 165.34% | 280.56% | 355.04% | 523.93% | 442.97% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | 379.26% | — | — | — | — | |
| Adobe Inc. | 1,287.44% | 1,554.19% | — | — | — | |
| AppLovin Corp. | 521.30% | — | — | — | — | |
| Cadence Design Systems Inc. | 1,128.47% | — | — | — | — | |
| Datadog Inc. | 4,145.45% | — | — | — | — | |
| International Business Machines Corp. | 105.45% | — | — | — | — | |
| Intuit Inc. | 1,489.94% | — | — | — | — | |
| Microsoft Corp. | 1,148.11% | — | — | — | — | |
| Oracle Corp. | 514.72% | — | — | — | — | |
| Palantir Technologies Inc. | 1,366.76% | — | — | — | — | |
| Palo Alto Networks Inc. | 771.73% | — | — | — | — | |
| Salesforce Inc. | 620.94% | — | — | — | — | |
| ServiceNow Inc. | 1,555.49% | — | — | — | — | |
| Synopsys Inc. | 1,126.17% | 803.94% | — | — | — | |
| Workday Inc. | 1,185.07% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 MVA. See details »
2 2021 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × 26,955 ÷ 16,303 = 165.34%
3 Click competitor name to see calculations.
The financial performance between 2017 and 2021 exhibits a divergence between absolute market value growth and the efficiency of value creation relative to revenue. While both market value added and adjusted revenue experienced significant growth through 2020, the MVA margin demonstrates a persistent downward trajectory over the same period.
- Market Value Added (MVA)
- A growth trend was observed from 2017 to 2020, with MVA increasing from 25,537 million USD to a peak of 41,910 million USD. However, this trend reversed sharply in 2021, where value contracted to 26,955 million USD, representing a decline of approximately 35.7% from the previous year's high.
- Adjusted Revenue
- Revenue demonstrated substantial expansion, particularly after 2018. Adjusted revenue rose from 5,662 million USD in 2018 to 16,303 million USD by December 31, 2021. This represents a nearly threefold increase in revenue over the four-year period, indicating significant operational scaling.
- MVA Margin
- The MVA margin peaked in 2018 at 523.93% before entering a period of continuous decline. By December 31, 2021, the margin fell to 165.34%. This contraction indicates that while the company increased its revenue base aggressively, the market value added did not grow at a proportional rate, leading to a reduction in the value created per unit of adjusted revenue.
The correlation between the rapid increase in adjusted revenue and the shrinking MVA margin suggests a dilution in the market's valuation of the company's value-added efficiency. The sharp drop in absolute MVA in 2021, coupled with continued revenue growth, further emphasizes a disconnect between top-line expansion and market-perceived value creation.
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