ACIW
ACI Worldwide, Inc.
$58.67
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 33.4% below fair value
You pay
$58.67
Bear
$47.98
Fair
$88.05
Bull
$136.57
Bear
$47.98
-18.2%
11% stage 1 growth, 11% discount
Fair
$88.05
+50.1%
18% stage 1 growth, 11% discount
Bull
$136.57
+132.8%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
25.8x
Market is pricing in (growth)
12.4%
vs 18.4% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $64.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $88.05 per share.
Warnings
Stock-based employee pay equals 31% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $64.00 (from 17 analysts). Our estimate is 50% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions