One-glance verdict
Undervalued
$68.72 our estimate vs market $52.91
Wall Street consensus: $67.33 (-2.0% lower than our fair-value estimate)
23% below our estimate, below the bear case
Fundamentals snapshot
ACI Worldwide, Inc.
ACIW · NMS · Technology · Software - Infrastructure
Current price
$52.91
52-week range
$38.05 - $61.08
Market cap
$5.34B
Balance sheet
Watch
5.70x Adequate
Net debt $696.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 3.4% last year.
- Reward Returns 15.6% on equity, ahead of 20% of its peers.
- Risk Operating margin compressed from 14.3% to 10.5% over 3 years.
- Risk Insider ownership is only 1.3% (peer median: 4.3%).
What this company does
ACI Worldwide, Inc.
ACI Worldwide provides the essential behind-the-scenes software that allows banks, big stores, and billers like your utility company to process electronic payments and prevent fraud. The company makes most of its money from long-term contracts for using and supporting this software, which creates steady recurring revenue (income that is predictable and comes in regularly, like a subscription). This is important because having reliable, repeating sales makes a company's financial performance less volatile than relying on one-off projects.
How the company got here
ACI Worldwide started in 1975 in Omaha, Nebraska, creating software for the then-new, highly reliable Tandem computers that banks were starting to use. Its first major product, called BASE24, was software to run the growing networks of ATMs (Automated Teller Machines) and later expanded to handle point-of-sale terminals where you swipe your card. Over the years, it grew by expanding into new areas of electronic payments like online banking and bill pay, often by acquiring other companies. It became a publicly traded company in 1995, and today it is a global business that helps move trillions of dollars electronically every day.
What it actually does
You won't see ACI Worldwide's name on your credit card or bank statement, because its customers are other businesses, not everyday people. It creates the complex software that works behind the scenes for banks, big stores (merchants), and companies that send you bills (billers). This software helps these businesses securely process all kinds of electronic payments, from card swipes and online purchases to real-time money transfers and automatic bill payments. ACI's systems also include tools to detect and prevent fraud, which is a critical part of handling electronic money.
Payment Software
This is the company's largest business segment, making up more than half of its revenue. It provides the core software that financial institutions like banks and payment processors use to run their payment systems. This includes software for issuing credit and debit cards, processing card transactions from merchants, and connecting to real-time payment networks that move money instantly. Essentially, when a bank needs to modernize its old payment technology or a merchant needs a system to handle a high volume of online sales, they buy or license software from this part of ACI.
Billers
This segment, which accounts for a little less than half of the company's business, focuses on making it easier for large organizations to send bills and for you to pay them. Its customers are companies in industries like utilities, insurance, healthcare, and telecom. ACI provides these companies with a platform, like its Speedpay product, that lets them send electronic bills and offer customers many ways to pay, such as online, by phone, or with automatic payments. ACI makes money from these transactions, and this part of the business has been growing steadily.
What management is betting on now
ACI's leadership is focused on the global shift toward real-time payments, where money moves instantly between accounts, and is investing heavily in its software to support this. They are also pushing to deliver more of their software through the cloud, which is like renting software over the internet instead of installing it on-site (a model known as Software-as-a-Service or SaaS). Another key priority is expanding its tools for online merchants to help them manage the complexity of different payment types and to better fight fraud. The company sees a big opportunity in helping banks and billers replace their aging payment systems with more modern, flexible technology.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$50.50M
FY2024 Q4
$119.54M
FY2025 Q1
$76.05M
FY2025 Q2
$47.64M
FY2025 Q3
$69.63M
FY2025 Q4
$116.60M
FY2026 Q1
$61.24M
FY2026 Q2
$63.94M
Revenue
$430.42M
Net income
$31.80M
Diluted EPS
0.31
Operating cash flow
$70.79M
Free cash flow
$63.94M
Fetching…
Sources
Revenue
$425.75M
Net income
$38.31M
Diluted EPS
0.37
Operating cash flow
$64.25M
Free cash flow
$61.24M
Fetching…
Sources
Revenue
$481.60M
Net income
$64.34M
Diluted EPS
0.61
Operating cash flow
$121.78M
Free cash flow
$116.60M
Fetching…
Sources
Revenue
$482.36M
Net income
$91.25M
Diluted EPS
0.88
Operating cash flow
$73.04M
Free cash flow
$69.63M
Fetching…
Sources
Revenue
$401.26M
Net income
$12.20M
Diluted EPS
0.12
Operating cash flow
$49.80M
Free cash flow
$47.64M
Fetching…
Sources
Revenue
$394.56M
Net income
$58.87M
Diluted EPS
0.55
Operating cash flow
$78.22M
Free cash flow
$76.05M
Fetching…
Sources
Revenue
$453.04M
Net income
$98.56M
Diluted EPS
0.92
Operating cash flow
$126.48M
Free cash flow
$119.54M
Fetching…
Sources
Revenue
$451.75M
Net income
$81.43M
Diluted EPS
0.77
Operating cash flow
$54.01M
Free cash flow
$50.50M
Fetching…
Sources
Is it cheap or expensive?
Fair value $68.72 vs current price $52.91
Wall Street consensus is the average analyst price target: $67.33 (-2.0% lower than our fair-value estimate).
Our most-likely fair value is $68.72 a share — about 29.9% above today's price of $52.91, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $696.2M. Interest coverage 5.7x.
Net debt
$696.20M
Interest coverage
5.70x
ACI Worldwide, Inc.'s profit covers its interest bill about 5.7 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
ACIW
BASELINE
ACI Worldwide, Inc.
Total debt $863.59M Interest coverage 5.70x This is the baseline the peer rows are being compared against.
Total debt $21.26B Interest coverage 4.50x -21% vs ACIW Carries about 1.3x less debt cushion than ACIW.
Total debt — Interest coverage 3.72x -35% vs ACIW Carries about 1.5x less debt cushion than ACIW.
Total debt $5.36B Interest coverage 2.76x -52% vs ACIW Carries about 2.1x less debt cushion than ACIW.
Total debt $2.81B Interest coverage 6.27x +10% vs ACIW Has roughly the same debt cushion as ACIW.
Total debt $4.57B Interest coverage 1.77x -69% vs ACIW Carries about 3.2x less debt cushion than ACIW.
What you should know
The case for and against ACIW
3 Rewards
3 Risks
Rewards
-
Revenue grew 3.4% last year.
-
Returns 15.6% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 14.3% to 10.5% over 3 years.
-
Insider ownership is only 1.3% (peer median: 4.3%).
-
Stock trades 2.0% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
24.27x
Forward P/E
13.60x
P/B
3.58x
P/S
2.93x
EV/EBITDA
15.64x
PEG ratio
1.78x
Profitability
How much profit each dollar creates
Gross margin
49.1%
Operating margin
10.5%
Net margin
12.4%
ROE
15.6%
ROA
7.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.58x
Current ratio
1.58x
Quick ratio
0.87x
Total debt
$863.59M
Total cash
$167.40M
Growth
How the business has been compounding
Revenue TTM
$1.82B
Revenue 5Y CAGR
6.4%
EPS TTM
2.18
EPS 5Y CAGR
20.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$329.85M
Free CF TTM
$309.92M
FCF margin
17.0%
Dividend
Shareholder payout
Yield
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Payout ratio
0.0%
Last ex-div date
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