Fidelity National Information Services, Inc.FISNYSE

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DCF Valuation

⚠️Model Warnings

•Revenue projections show 21% decline from peak. Analyst estimates may reflect secular headwinds or transition period.

DCF Valuation Summary

Strong Buy

Fair Value: $141.87 per share(market-calibrated)

+183.3%

Upside to Fair Value

Current

$50.08

Pure Model

$150.65

Fair Value

$141.87

Bull Case

$177.97

Bear Case

$124.76

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

0.50%

Calibrated Growth

2.61%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $150.65.

What's Driving This Ratingfor FIS

✓

CapEx already efficient

CapEx at 3.53% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 13.55% — below the sector mature average of 25.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $3.0B (22.00% margin).

⚠

Analyst growth decelerates sharply

Revenue growth drops from 22.58% in Year 1 to 3.75% by Year 5 (per analyst consensus). This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $122.88/share (22.6x terminal FCF) while exit multiple gives $178.42/share (37.3x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 325bps below the model's 3.75%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 74.98% indicates efficient cash generation. FCF reaches $4.3B by Year 10 (31.67% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.91

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.59%

Cost of Debt

Pre-tax Cost of Debt9.69%

Tax Rate30.00%

After-tax Cost of Debt6.79%

Equity Weight (E/V)86.58%

Debt Weight (D/V)13.42%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (86.58% × 8.59%) + (13.42% × 6.79%)

= 8.35%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$13.1B	$12.1B	$11.4B	$12.3B	$13.7B
EBIT	$1.8B	$1.6B	$1.8B	$2.3B	$3.0B
Tax	$532M	$493M	$541M	$703M	$903M
NOPAT	$1.2B	$1.1B	$1.3B	$1.6B	$2.1B
+ Depreciation	$2.6B	$2.5B	$2.3B	$2.5B	$2.8B
- Capex	$462M	$428M	$402M	$433M	$483M
- Δ NWC	$289M	-$276M	$49M	$53M	$59M
Free Cash Flow	$3.1B	$3.4B	$3.1B	$3.6B	$4.3B
Discount Factor	0.923	0.786	0.670	0.570	0.449
Present Value	$2.9B	$2.7B	$2.1B	$2.1B	$1.9B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$4.3B

Terminal Growth Rate3.75%

WACC8.35%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$97.7B

PV of Terminal Value$43.8B

Exit Multiple Method

Year 10 EBITDA$5.8B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$161.8B

PV of Terminal Value$72.6B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$23.1B

PV of Terminal Value$43.8B

Enterprise Value$66.9B

(-) Net Debt$3.4B

Equity Value$63.5B

Shares Outstanding517M

Price per Share$122.88

Exit Multiple Method

PV of Projected FCFs$23.1B

PV of Terminal Value$72.6B

Enterprise Value$95.7B

(-) Net Debt$3.4B

Equity Value$92.2B

Shares Outstanding517M

Price per Share$178.42

Pure Model Fair Value

$150.65

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
6.35%	$191.77	$202.57	$217.52	$239.60	$237.23
7.35%	$163.30	$169.18	$176.68	$186.61	$200.35
8.35%	$142.74	$146.31	$150.65	$156.05	$162.95
9.35%	$126.76	$129.09	$131.84	$135.12	$139.12
10.35%	$113.78	$115.38	$117.23	$119.37	$121.90

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$124.76

149.1% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.14

Base Case

$150.65

200.8% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 0.91

Bull Case

$177.97

255.4% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 0.77

Key Assumptions & Drivers• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth22.58%

Year 3 Revenue Growth-15.96%

Year 5 Revenue Growth3.75%

Year 7 Revenue Growth3.75%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin13.55%

Terminal EBIT Margin25.00%

Tax Rate30.00%

Historical Capex / Rev3.53%

NWC / Revenue12.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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