ACIW
ACI Worldwide, Inc.
$42.72
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 52.3% below fair value
You pay
$42.72
Bear
$48.80
Fair
$89.55
Bull
$138.89
Bear
$48.80
+14.2%
11% stage 1 growth, 11% discount
Fair
$89.55
+109.6%
18% stage 1 growth, 11% discount
Bull
$138.89
+225.1%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
19.5x
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 $70.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $89.55 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 $70.00 (from 17 analysts). Our estimate is 37% 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