Stock Analysis on Net

Fidelity National Information Services Inc. (NYSE:FIS)

This company has been moved to the archive! The financial data has not been updated since May 2, 2023.

Present Value of Free Cash Flow to the Firm (FCFF)

Microsoft Excel

Intrinsic Stock Value (Valuation Summary)

Fidelity National Information Services Inc., free cash flow to the firm (FCFF) forecast

US$ in millions, except per share data

Microsoft Excel
Year Value FCFFt or Terminal value (TVt) Calculation Present value at 8.11%
01 FCFF0 2,878
1 FCFF1 3,001 = 2,878 × (1 + 4.26%) 2,776
2 FCFF2 3,113 = 3,001 × (1 + 3.74%) 2,664
3 FCFF3 3,214 = 3,113 × (1 + 3.23%) 2,543
4 FCFF4 3,301 = 3,214 × (1 + 2.71%) 2,416
5 FCFF5 3,373 = 3,301 × (1 + 2.20%) 2,284
5 Terminal value (TV5) 58,292 = 3,373 × (1 + 2.20%) ÷ (8.11%2.20%) 39,472
Intrinsic value of Fidelity National Information Services Inc. capital 52,155
Less: Debt (fair value) 18,264
Intrinsic value of Fidelity National Information Services Inc. common stock 33,891
 
Intrinsic value of Fidelity National Information Services Inc. common stock (per share) $57.21
Current share price $53.13

Based on: 10-K (reporting date: 2022-12-31).

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.


Weighted Average Cost of Capital (WACC)

Fidelity National Information Services Inc., cost of capital

Microsoft Excel
Value1 Weight Required rate of return2 Calculation
Equity (fair value) 31,476 0.63 11.75%
Debt (fair value) 18,264 0.37 1.84% = 2.60% × (1 – 29.40%)

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in millions

   Equity (fair value) = No. shares of common stock outstanding × Current share price
= 592,436,518 × $53.13
= $31,476,152,201.34

   Debt (fair value). See details »

2 Required rate of return on equity is estimated by using CAPM. See details »

   Required rate of return on debt. See details »

   Required rate of return on debt is after tax.

   Estimated (average) effective income tax rate
= (21.00% + 47.00% + 36.00% + 24.20% + 18.80%) ÷ 5
= 29.40%

WACC = 8.11%


FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

Fidelity National Information Services Inc., PRAT model

Microsoft Excel
Average Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in millions)
Interest expense 300 216 339 389 314
Net earnings (loss) attributable to FIS common stockholders (16,720) 417 158 298 846
 
Effective income tax rate (EITR)1 21.00% 47.00% 36.00% 24.20% 18.80%
 
Interest expense, after tax2 237 114 217 295 255
Add: Cash dividends declared and other distributions 1,140 968 873 658 422
Interest expense (after tax) and dividends 1,377 1,082 1,090 953 677
 
EBIT(1 – EITR)3 (16,483) 531 375 593 1,101
 
Short-term borrowings 3,797 3,911 2,750 2,823 267
Current portion of long-term debt 2,133 1,617 1,314 140 48
Long-term debt, excluding current portion 14,207 14,825 15,951 17,229 8,670
Total FIS stockholders’ equity 27,218 47,347 49,300 49,440 10,215
Total capital 47,355 67,700 69,315 69,632 19,200
Financial Ratios
Retention rate (RR)4 -1.04 -1.91 -0.61 0.39
Return on invested capital (ROIC)5 -34.81% 0.79% 0.54% 0.85% 5.73%
Averages
RR -0.79
ROIC -5.38%
 
FCFF growth rate (g)6 4.26%

Based on: 10-K (reporting date: 2022-12-31), 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).

1 See details »

2022 Calculations

2 Interest expense, after tax = Interest expense × (1 – EITR)
= 300 × (1 – 21.00%)
= 237

3 EBIT(1 – EITR) = Net earnings (loss) attributable to FIS common stockholders + Interest expense, after tax
= -16,720 + 237
= -16,483

4 RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [-16,4831,377] ÷ -16,483
=

5 ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × -16,483 ÷ 47,355
= -34.81%

6 g = RR × ROIC
= -0.79 × -5.38%
= 4.26%


FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value0 × WACC – FCFF0) ÷ (Total capital, fair value0 + FCFF0)
= 100 × (49,740 × 8.11%2,878) ÷ (49,740 + 2,878)
= 2.20%

where:

Total capital, fair value0 = current fair value of Fidelity National Information Services Inc. debt and equity (US$ in millions)
FCFF0 = the last year Fidelity National Information Services Inc. free cash flow to the firm (US$ in millions)
WACC = weighted average cost of Fidelity National Information Services Inc. capital


FCFF growth rate (g) forecast

Fidelity National Information Services Inc., H-model

Microsoft Excel
Year Value gt
1 g1 4.26%
2 g2 3.74%
3 g3 3.23%
4 g4 2.71%
5 and thereafter g5 2.20%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5g1) × (2 – 1) ÷ (5 – 1)
= 4.26% + (2.20%4.26%) × (2 – 1) ÷ (5 – 1)
= 3.74%

g3 = g1 + (g5g1) × (3 – 1) ÷ (5 – 1)
= 4.26% + (2.20%4.26%) × (3 – 1) ÷ (5 – 1)
= 3.23%

g4 = g1 + (g5g1) × (4 – 1) ÷ (5 – 1)
= 4.26% + (2.20%4.26%) × (4 – 1) ÷ (5 – 1)
= 2.71%