Is There Value in ACI Worldwide Shares After a 6.8% Dip in 2025?

Thinking about what to do with your shares of ACI Worldwide? You’re not alone. This is the moment when many investors start weighing whether to stick with the payment giant, double down, or wait it out. ACI’s story over the past year has been anything but boring. While the stock’s recent returns might not look thrilling at first glance, the bigger picture is packed with potential. Shares are down 4.8% in the past week and have dipped 3.7% over the last month. Year-to-date, ACI has slipped 6.8%, but a longer-term view over three and five years shows gains of 107.6% and 58.6% respectively.

What’s behind these numbers? Much of the action has come alongside ACI’s ongoing innovation in real-time payments and strategic partnerships, developments that hint at both new growth opportunities and a changing risk landscape. While the headlines lately have focused on industry shifts rather than major, headline-grabbing events, the consistent news around digital payment adoption continues to shape investor expectations.

But here is the real kicker. According to a six-step valuation analysis, ACI Worldwide scores a perfect 6 out of 6, indicating it appears undervalued across every key metric in our checklist. Curious how we got to that number, and what it might mean for your portfolio? Next, we’ll dig into the main valuation models and show how they stack up. At the end, we will offer a smarter perspective for sizing up whether ACI is truly a buy right now.

Why ACI Worldwide is lagging behind its peers

Approach 1: ACI Worldwide Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and then discounting them back to today's value. For ACI Worldwide, this approach starts with its most recent annual Free Cash Flow of $262 million. Analysts expect these cash flows to rise significantly over the coming years, reaching $381 million by the end of 2026. Looking further ahead, projections, including some extrapolated by Simply Wall St, put ACI's Free Cash Flow at $690 million by 2035.

These figures are calculated using a two-stage Free Cash Flow to Equity method. By discounting each of these future cash flows using an appropriate rate, the model arrives at an estimated intrinsic fair value per share of $82.68. Based on today’s market price, this implies the stock is trading at a 40.7% discount to its DCF value, indicating it appears significantly undervalued.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ACI Worldwide.

Our Discounted Cash Flow (DCF) analysis suggests ACI Worldwide is undervalued by 40.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: ACI Worldwide Price vs Earnings

The Price-to-Earnings (PE) ratio is a go-to metric for valuing profitable companies because it quickly relates a company's stock price to how much it actually earns. Investors favor the PE ratio as it helps them gauge whether a stock offers good value for its underlying business performance. Of course, what counts as a "normal" or "fair" PE ratio depends not only on how fast a company is expected to grow, but also the risks it faces compared to the sector at large. Higher growth or lower risk often justifies a higher PE, while slower growth or greater uncertainty calls for a lower one.

For ACI Worldwide, the current PE ratio sits at 20.1x. Compared to the broader software industry average of 35.3x, and the company’s peer group average of 29.5x, ACI trades at a noticeable discount. But just looking at industry or peer averages can be misleading because each company has its own unique blend of growth prospects, profit margins, and risks.

This is where Simply Wall St’s Fair Ratio comes in, a metric tailored to ACI’s specific attributes, from its earnings growth outlook to its profitability, industry, and market size. For ACI, the Fair Ratio is 25.3x, reflecting what would be a justifiable PE given all of these factors together. Since ACI’s actual PE is about 5 points below this fair value, the shares appear to be undervalued when accounting for both the company’s fundamentals and broader market context.

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 ACI Worldwide Narrative

Earlier, we mentioned there’s an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal story or thesis about a company; it’s how you connect what you know about ACI Worldwide’s business, its potential, and the risks you see, to specific estimates for future revenue, profit margins, and ultimately, what you think the stock is really worth.

Narratives work by linking a company’s evolving story to a financial forecast, and then to a fair value, making it easy for you to assess whether the current price offers an opportunity or a red flag. On Simply Wall St’s Community page, which millions of investors use, you’ll find that Narratives are user-friendly and update automatically as new facts, such as earnings results or major industry news, emerge.

This means you can compare your fair value with the market price in real time, and make more informed buy, hold, or sell decisions. For ACI Worldwide, some investors believe that the launch of its cloud-native payments platform and rising recurring revenues justify price targets as high as $77.00, while others see industry challenges and assign a more conservative fair value of just $60.00. Your Narrative can (and should) reflect your own view.

Do you think there's more to the story for ACI Worldwide? 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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