ACI Worldwide Inc (NASDAQ:ACIW) – An Undervalued Stock Worth a Closer Look

ACI Worldwide Inc (NASDAQ:ACIW) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company, which provides real-time electronic payment solutions, shows a combination of solid profitability, reasonable financial health, and attractive valuation metrics.

Valuation

ACIW stands out with a Valuation Rating of 7/10, indicating it is priced attractively relative to its fundamentals. Key points include:

• Price/Earnings (P/E) ratio of 17.90, cheaper than 83.7% of its software industry peers.
• Enterprise Value/EBITDA and Price/Free Cash Flow ratios are also favorable, ranking better than 90.4% and 86.9% of competitors, respectively.
• The stock trades below the S&P 500 average P/E of 27.29, suggesting room for upside if market recognition improves.

Profitability

ACIW earns a strong Profitability Rating of 8/10, driven by:

• Return on Assets (8.42%) and Return on Equity (18.19%) outperform most industry peers.
• Operating Margin of 22.00% ranks in the top 10% of the sector.
• Consistent earnings and cash flow over the past five years reinforce financial stability.

Financial Health

With a Health Rating of 5/10, ACIW maintains reasonable solvency but has some debt considerations:

• Altman-Z score of 3.44 suggests low bankruptcy risk.
• Debt/Equity ratio of 0.55 is manageable but higher than 66% of peers.
• Positive free cash flow helps cover obligations, with a Debt/FCF ratio of 3.05.

Growth

ACIW’s Growth Rating of 6/10 reflects steady expansion:

• Revenue grew 13.1% YoY, with a 5-year average growth of 4.85%.
• EPS surged 89.6% in the past year, supported by improving margins.
• Forward estimates suggest continued EPS growth of 11.2% annually.

For a deeper dive into ACIW’s fundamentals, review the full report here.

Our Decent Value screener lists more stocks with similar characteristics and is updated daily.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.