The only analyst with a sell rating on Fiserv Inc. ahead of the company’s crushing stock sell-off, says the writing had been on the wall for months.
To much of Wall Street, the fintech’s massive profit loss was a surprise, with nearly 80 percent of analysts tracking Fiserv having buy-equivalent ratings earlier this week. But Dominic Ball, a 26-year-old analyst at Rothschild & Co Redburn, had given the company a sell rating in April.
On Wednesday, his skepticism was rewarded when the company’s shares plunged a record 44 percent – wiping out about $30 billion in market capitalization – after it cut its full-year profit forecast and said it would not be able to deliver on earlier promises to investors. At the center of Fiserv’s problems was Clover, its flagship point-of-sale system that frustrated customers with its redundant fees. It was an issue that featured prominently in Ball’s research, which involved extensive conversations with the system’s users.
“There was a big divide between what was happening on the ground, when we spoke to traders and retailers, and what the investor base thought was happening,” the London-based analyst said, adding that customers were quick to express their appreciation.
“I had so many emails I couldn’t answer everyone,” he said.
Fiserv’s blowout is the latest event to shed light on an oft-cited bug in Wall Street’s research machine: the overly optimistic analysis often produced by people charged with keeping investors informed of companies’ strengths and weaknesses. Data collected by Bloomberg shows that only 5 percent of S&P 500 company ratings are “sell.”
An extreme example of this trend occurred earlier this year, when shares of insurance giant UnitedHealth Group Inc – with a 97 percent “buy” ratio – took a nosedive after the company cut its full-year forecast, replaced its CEO and announced it faces civil and criminal investigations into its operations by the Justice Department.
Analysts hastily downgraded their ratings on Fiserv after Wednesday’s earnings results, with many saying a hoped-for turnaround in the company’s fortunes is unlikely anytime soon. For Ball, the company’s problems came into focus after he spent six months investigating point-of-sales providers in 2023 as part of his coverage of rival Toast Inc.
According to Ball, Clover’s shortcomings were due to distribution and limited market share growth. Although the system — used to handle and process transactions — did well among merchants with annual sales between $200,000 and $250,000, the company had captured most of its market by the end of last year, he said.
Former CEO Frank Bisignano, who left the company in May to take a job in U.S. President Donald Trump’s administration, had based much of the company’s predictions for future growth on Clover continuing to outperform the market.
Ball posted a “buy” on Toast – which he believes is a superior product to Clover – in February 2024. The company’s shares have since risen nearly 90 percent, as of Thursday’s close. In a Bloomberg Television interview on Friday, Ball said Toast is his top stock pick among payments companies.
“Toast is a materially undervalued stock,” he says. “We really like Toast.” The company’s shares rose as much as 5.8 percent in New York on Friday.
Fiserv’s shares, on the other hand, are down about 70 percent at Thursday’s close since Ball issued a selloff on April 17 of this year. In addition to Fiserv’s profit cut, investors were also surprised Wednesday by a revenue shortfall in the company’s financial solutions division, which provides the underlying technology to thousands of banks and credit unions across the country.
“I think what happened is the management team very aggressively shifted their focus to Clover because it drove the stock down,” he said. As a result, “they may have underinvested in the rest of the company.”
Ball also theorized that Fiserv may have lost customers from “their core banking product and that’s why that spilled over into everything.”
Fresh face
Ball graduated from the University of Exeter in 2021. During his studies he did a short stint as an auditor, before becoming an equity analyst with a focus on fintech. His call to Fiserv received rave reviews from friends, customers and strangers alike, he said.
Customers “were very grateful, especially those who had sold,” he said.
As for Fiserv, Ball quickly reiterated his sell recommendation even after Wednesday’s plunge, saying the company was unlikely to resume operations anytime soon. In a letter to clients, he wrote that “we do not consider Fiserv to be an investable asset during this adjustment phase.”
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Published on November 1, 2025
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