Is There Now an Opportunity in SS&C Technologies After Its 15% Surge in 2025?

If you have been weighing your options on SS&C Technologies Holdings stock, you are not alone. Investors are taking a closer look after the company powered through a climb of 95% over the last three years, handily outpacing broader benchmarks. While the last month has shown a slight retreat, with the stock down 2.3% and a modest pullback of 1.4% in the last week, the year-to-date gain still stands at an impressive 15.1%. Anyone holding the stock for the past year has enjoyed a 17.8% return, highlighting both long-term growth potential and some recent volatility as the market weighs broader tech sentiment and shifting risk appetites.

Amid these movements, there is one number that matters for value-focused investors: the valuation score. For SS&C Technologies Holdings, the company earns a 4 out of 6, meaning it is undervalued in four different key checks. That is not easy to find in today’s market, and it immediately raises the question: what is driving this score? Does it signal a buying opportunity or a need for caution?

We are about to break down the stock’s valuation from several important angles. Read through to the end for a perspective that can help you see whether these numbers really matter for long-term returns.

SS&C Technologies Holdings delivered 17.8% returns over the last year. See how this stacks up to the rest of the Professional Services industry.

Approach 1: SS&C Technologies Holdings Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's true value by projecting its future cash flows and discounting them back to today's value. This approach is particularly useful for understanding businesses with stable and predictable cash generation such as SS&C Technologies Holdings.

Currently, SS&C Technologies generates free cash flow of $1.20 billion. Analysts expect this figure to rise steadily over the coming years, with projections (including Simply Wall St's longer-term estimates) suggesting $3.40 billion in annual free cash flow by 2035. This growth reflects both analyst input for the nearer term and modeled assumptions for the following years.

Based on all projected and discounted cash flows, the DCF valuation model calculates an intrinsic value of $224.73 per share. Compared to recent trading levels, this indicates a 61.4% discount, meaning the stock appears significantly undervalued relative to its fundamentals.

For investors, the DCF approach emphasizes strong long-term cash flow growth and a wide margin compared to the current share price, highlighting notable value potential.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for SS&C Technologies Holdings.

Our Discounted Cash Flow (DCF) analysis suggests SS&C Technologies Holdings is undervalued by 61.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: SS&C Technologies Holdings Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like SS&C Technologies Holdings because it connects what investors are willing to pay today with the company’s actual earnings power. When a business generates consistent profits, its PE ratio provides an intuitive way to see how much investors are paying for each dollar of earnings.

Determining what counts as a "normal" or "fair" PE ratio often depends on growth expectations and risk. Faster-growing companies or those with steadier cash flows usually command higher multiples, while riskier or slower-growing peers get lower ones.

Currently, SS&C Technologies trades at a PE ratio of 26.3x. This is almost identical to the average for the Professional Services industry at 26.5x, but notably higher than its direct peer average of 22.8x. At first glance, this places SS&C roughly in line with the industry but a bit above its closest peers.

To take this further, Simply Wall St uses a proprietary "Fair Ratio." This metric moves beyond simple peer comparisons and instead tailors the PE based on SS&C’s unique mix of earnings growth, profit margins, size, sector, and specific risk factors. The idea is to set a rational benchmark for what investors should pay given the company’s full profile, rather than relying on broader averages alone.

SS&C’s Fair Ratio is calculated at 29.6x. This sits above its current 26.3x PE, meaning the current valuation leaves some upside on the table when all the key factors are considered. By this yardstick, the market is giving the stock a modest discount relative to its quantified potential, suggesting value for investors looking for growth and profitability at a reasonable price.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your SS&C Technologies Holdings Narrative

Earlier, we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative goes beyond the usual metrics by letting you, as an investor, tell the story behind the numbers. This connects your perspective on the company’s future to your assumptions for revenue, earnings, and margins, and ultimately to your own estimate of what the shares are worth.

With Narratives, you link what you believe will happen (the story) to financial forecasts and instantly see your own Fair Value based on these projections. This approach is easy to try and widely used on Simply Wall St's Community page by millions of investors, providing a dynamic, personalized tool for investment decisions.

A major advantage of Narratives is that they update automatically with new information, such as news or quarterly results, so your fair value always reflects the latest realities. By comparing your Fair Value with today’s share price, you can act with more confidence by knowing whether you believe the stock is a buy, hold, or sell at this moment.

For example, some SS&C investors might create optimistic Narratives focused on international expansion and automation, setting a Fair Value as high as $110 per share. More cautious Narratives, perhaps concerned with market risks, see a Fair Value closer to $88.

Do you think there's more to the story for SS&C Technologies Holdings? Create your own Narrative to let the Community know!

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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