While growth is established for NASDAQ:ACIW, the stock's valuation remains reasonable.

Discover ACI WORLDWIDE INC (NASDAQ:ACIW), an undervalued growth gem identified by our stock screener. NASDAQ:ACIW is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Growth Analysis for NASDAQ:ACIW

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:ACIW has earned a 7 for growth:

• The Earnings Per Share has grown by an impressive 163.75% over the past year.
• The Earnings Per Share has been growing by 8.45% on average over the past years. This is quite good.
• The Revenue has grown by 13.31% in the past year. This is quite good.
• Based on estimates for the next years, ACIW will show a very strong growth in Earnings Per Share. The EPS will grow by 24.63% on average per year.
• ACIW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.02% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Understanding NASDAQ:ACIW's Valuation Score

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:ACIW has achieved a 7 out of 10:

• ACIW's Price/Earnings ratio is a bit cheaper when compared to the industry. ACIW is cheaper than 76.53% of the companies in the same industry.
• 71.84% of the companies in the same industry are more expensive than ACIW, based on the Price/Forward Earnings ratio.
• ACIW's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 92.74.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ACIW indicates a rather cheap valuation: ACIW is cheaper than 89.53% of the companies listed in the same industry.
• ACIW's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ACIW is cheaper than 88.09% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• ACIW has an outstanding profitability rating, which may justify a higher PE ratio.
• ACIW's earnings are expected to grow with 24.63% in the coming years. This may justify a more expensive valuation.

Looking at the Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:ACIW, the assigned 5 for health provides valuable insights:

• ACIW has an Altman-Z score of 3.65. This indicates that ACIW is financially healthy and has little risk of bankruptcy at the moment.
• The Debt to FCF ratio of ACIW is 3.56, which is a good value as it means it would take ACIW, 3.56 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 3.56, ACIW is doing good in the industry, outperforming 61.01% of the companies in the same industry.

Assessing Profitability for NASDAQ:ACIW

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:ACIW scores a 8 out of 10:

• ACIW's Return On Assets of 7.34% is amongst the best of the industry. ACIW outperforms 81.23% of its industry peers.
• ACIW's Return On Equity of 17.09% is amongst the best of the industry. ACIW outperforms 85.20% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 11.33%, ACIW belongs to the top of the industry, outperforming 88.09% of the companies in the same industry.
• The 3 year average ROIC (6.89%) for ACIW is below the current ROIC(11.33%), indicating increased profibility in the last year.
• The Profit Margin of ACIW (14.04%) is better than 81.23% of its industry peers.
• ACIW's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 22.20%, ACIW belongs to the top of the industry, outperforming 89.89% of the companies in the same industry.
• ACIW's Operating Margin has improved in the last couple of years.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of ACIW

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.