ACI Worldwide (ACIW) Following Connetic Bank Win Still Looks Undervalued
ACI Worldwide (ACIW) just picked up a fresh payments assignment as the Federal Home Loan Bank of Cincinnati shifts member funding transaction processing to ACI Connetic, with Fedwire connectivity as a central part of the deal.
Recent deal momentum has come against a mixed tape for ACI Worldwide, with the share price at US$49.69, a 1-day share price return of 1.66%, a year-to-date share price gain of 8.8% and a 3-year total shareholder return of 136.28%, even though the 1-year total shareholder return is down 6.28%.
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Bulls point to ACI Worldwide’s new Connetic wins and solid recent earnings growth, while bears focus on the mixed share performance. Which side does the current valuation evidence support next?
Most Popular Narrative: 26% Undervalued
Against a last close of $49.69, the most followed narrative on ACI Worldwide pegs fair value at $67.33, which implies meaningful upside based on its cash flow profile and forecast profitability using a discount rate of 8.92%.
The official launch and positive customer reception of Connetic, ACI's next-generation cloud-native payments hub with AI-powered decisioning and real-time capabilities, positions the company to capitalize on increasing demand for scalable, secure digital payment processing and real-time payments globally, which supports accelerating recurring revenue growth and higher margins.
See why 9 investors see ACI Worldwide as 26% undervalued.
Result: Fair Value of $67.33 (UNDERVALUED)
Still, the bullish ACI Worldwide story could be knocked off course if competition in real time and digital currency payments squeezes pricing or if contract timing keeps Payment Software results choppy.
Find out about the key risks to this ACI Worldwide narrative.
Next Steps
Mixed signals on ACI Worldwide can create plenty of debate, so weigh the upside and downside yourself by checking the 4 key rewards and 1 important warning sign.
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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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