Whenever an entire sector appears to be on fire, as is the case with financials at the moment, there are usually areas of opportunity among stocks bucking the broad sector trend. 

One stock, Fintech company Fiserv Inc. (NASDAQ: FISV), even managed to break out of a base while not only financials, but the broad market plunged on April 25. 

Fintech gapped up to finish 2.38% higher in the session, following first-quarter results that topped analysts' estimates, according to Fiserv earnings data compiled by MarketBeat. 

The company earned $1.58 per share on revenue of $4.547 billion. That represented year-over-year growth of 13% on the bottom line and 10% on the top line. Those results came in ahead of Wall Street’s expectations; analysts were looking for earnings of $1.56 a share and revenue of $4.17 billion. 

Defied Expectations Of Damage

The expected results would have been gains over last year’s first quarter, but the company defied expectations of damage to its merchant business, due to meltdowns at Silicon Valley Bank and First Republic Bank Bank (NYSE: FRC). 

Fiserv provides software and services to banks, credit unions, and other financial institutions to enable transactions including deposits, withdrawals, and payments. Fiserv’s software also helps these institutions to provide services such as online banking, mobile banking, and bill payment.

It’s one of those companies that you probably interact with on a regular basis, but because it’s a business-to-business specialist, you don’t know its name. 

In addition to these core services, Fiserv also offers fraud detection and prevention, risk management, data analytics, and marketing services. Its client roster ranges from small community banks to large multinational corporations. 

With a market capitalization of $75.43 billion, Wisconsin-based Fiserv is easily a component of the S&P 500. 

Outpacing Chief Rival

Its chief rival, Fidelity National Information Services Inc. (NYSE: FIS), has been muddling along at a slower pace. Its revenue was $3.714 billion in the most recent quarter, a gain of only 1%. Fidelity’s revenue has been growing in the single digits for the past four quarters, decelerating during that time. Fidelity’s earnings fell by 11% most recently, marking the sixth quarter in a row of net income deceleration. 

Fiserv’s growth rates on both the top and bottom lines have been stronger. 

The two companies’ charts also show a distinct divergence. Fiserv’s gap-up on April 25 meant the stock cleared a base above a buy point of $119.48, as you can see on the Fiserv chart. The stock is up 15.03% in the past three months and 18.82% year-to-date. 

Meanwhile, the Fidelity National Information Services chart, meanwhile, shows a stock that’s been in freefall, shedding 24.82% in the past three months and 17.76% year-to-date.

Smackdown After Bank Meltdown

Payment processors, including another player in the space, Global Payments Inc. (NYSE: GPN) got smacked in March as Silicon Valley Bank unraveled, due to concerns about exposure to failing banks. 

At an industry conference soon after the Silicon Valley Bank news broke, Fiserv CEO Frank Bisignano downplayed concerns about his company’s level of risk due to the bank's failure, noting that SVB was not a core customer. 

In the first-quarter report, he alluded to those concerns in a statement, saying, “Our Merchant business continued to outperform, while our Payments and Fintech segments demonstrated the depth of our financial institution client partnerships, as we provided support and innovation through a volatile period.”

Notably, the company’s strong results outweighed concerns about First Republic Bank, whose earnings report revealed worse-than-expected damage. 

Upbeat Guidance

In fact, Fiserv issued guidance that topped Wall Street’s expectations. For the full year, the company expects organic revenue growth of 8% to 9% and adjusted earnings per share of $7.30 to $7.40, representing growth of 12% to 14%.

Fiserv previously said it anticipated organic revenue growth in a range between 7% and 9%. Its earnings forecast came in ahead of Wall Street’s expectations. 

On April 26, the stock remains in a buy zone, as it’s less than 1% above its buy point. The stock was adding to its gains early in the April 26 session.