- Investors may be wondering whether ACI Worldwide at around US$41.33 is priced for a rebound or still has work to do before it looks attractive on value.
- The stock has returned 1.2% over the last week, is roughly flat over 30 days with a 0.2% decline, and is still showing a 9.5% decline year to date and a 22.7% decline over 1 year, while the 3 year return sits at 58.6% and the 5 year return at 3.6%.
- Recent price action is occurring alongside ongoing interest in payment software providers and how they may fit into long term digital payment trends. For ACI Worldwide, this context helps frame whether current sentiment is overly cautious or simply adjusting to a more measured outlook.
- At the moment, ACI Worldwide holds a value score of 6/6. This invites a closer look at how different valuation methods arrive at that result and points to an even broader way to think about value, which will be covered at the end of this article.
Find out why ACI Worldwide's -22.7% return over the last year is lagging behind its peers.
Approach 1: ACI Worldwide Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and discounting them back to today’s value. It focuses on the cash that might be available to shareholders rather than just accounting profits.
For ACI Worldwide, the latest twelve month Free Cash Flow (FCF) stands at about $280.3 million. Analysts provide explicit forecasts out to 2027, with Simply Wall St extending those cash flow projections further. Using this two stage Free Cash Flow to Equity model, FCF is projected to be $481.8 million in 2035, with interim annual figures gradually stepping up from the 2026 and 2027 analyst estimates.
When all those projected cash flows are discounted back to today using the DCF approach, the estimated intrinsic value comes out at about $62.43 per share. Compared with the recent share price of roughly $41.33, the model points to an implied discount of 33.8%, which indicates that the shares are currently priced below this cash flow based estimate.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests ACI Worldwide is undervalued by 33.8%. Track this in your watchlist or portfolio, or discover 62 more high quality undervalued stocks.
Approach 2: ACI Worldwide Price vs Earnings
For a profitable company like ACI Worldwide, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of earnings. It ties the share price directly to current profitability, which is often a key anchor for expectations.
What counts as a “normal” or “fair” P/E tends to reflect two main forces: how quickly earnings are expected to grow and how much risk investors see in those earnings. Higher expected growth or lower perceived risk can support a higher P/E, while lower growth or higher risk usually point to a lower multiple.
ACI Worldwide currently trades on a P/E of 18.5x, compared with the broader Software industry average of about 29.2x and a peer group average near 45.4x. Simply Wall St’s Fair Ratio for ACI Worldwide is 23.7x, which is a proprietary estimate of what the P/E could be given factors like earnings growth, profit margins, industry, market cap and company specific risks.
This Fair Ratio can be more tailored than a simple comparison with peers or the industry, because it adjusts for company specific characteristics rather than assuming all software names deserve similar multiples. With the current P/E at 18.5x versus a Fair Ratio of 23.7x, the shares appear undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your ACI Worldwide Narrative
Earlier the article mentioned that there is an even better way to understand valuation, and Narratives are that tool. They let you attach a clear story about ACI Worldwide to concrete numbers such as your own fair value, revenue, earnings and margin assumptions. You can then compare that Fair Value with the current price and see, in one place on Simply Wall St's Community page, how an optimistic view that points to a Fair Value around US$70 can sit alongside a more cautious view nearer US$48.73. Both are automatically refreshed when new news or earnings arrive so you can decide whether the price you see on screen still fits the story you believe.
Do you think there's more to the story for ACI Worldwide? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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