Investment Thesis
ACI Worldwide demonstrates strong fundamental health with robust profitability (18.7% operating margin, 12.9% net margin), excellent cash generation (FCF of $309.9M), and healthy leverage (0.54x D/E). However, the extraordinary 4195% YoY revenue increase requires investigation for sustainability, though the modest net income growth of 11.6% suggests potential one-time gains or accounting adjustments.
ACIW Strengths
- Strong operating cash flow of $322.8M with exceptional FCF margin of 17.6%, indicating high-quality earnings
- Healthy balance sheet with moderate leverage (0.54x D/E) and solid interest coverage (8.8x)
- Solid profitability with operating margin of 18.7% and positive ROE of 14.9% and ROA of 7.3%
- Adequate liquidity position with current ratio of 1.54x supporting operational needs
ACIW Risks
- Extreme 4195% YoY revenue growth is highly anomalous and warrants investigation - likely driven by acquisition, accounting change, or one-time event rather than organic growth
- Significant gap between revenue growth (+4195%) and net income growth (+11.6%) suggests margin compression or non-recurring revenue items
- Substantial long-term debt of $817.6M reduces financial flexibility despite adequate coverage ratios
- Missing gross margin data limits ability to assess operational efficiency and cost structure
Key Metrics to Watch
- Year-over-year organic revenue growth rate and breakdown of revenue growth components
- Operating margin sustainability and trend analysis across quarters
- Free cash flow consistency and capital expenditure plans for growth investments
- Debt reduction trajectory and leverage ratios over next 2-4 quarters
ACIW Financial Metrics
Revenue
$1.8B
Net Income
$226.7M
EPS (Diluted)
$2.16
Free Cash Flow
$309.9M
Total Assets
$3.1B
Cash Position
$196.5M
ACIW Profitability Ratios
Gross Margin
N/A
Operating Margin
18.7%
Net Margin
12.9%
ROE
14.9%
ROA
7.3%
FCF Margin
17.6%
ACIW Balance Sheet & Liquidity
Current Ratio
1.54x
Quick Ratio
1.54x
Debt/Equity
0.54x
Debt/Assets
51.1%
Interest Coverage
8.80x
Long-term Debt
$817.6M
Disclaimer: This analysis is generated by Claude AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: Mar 19, 2026 |
Data as of: 2025-12-31 |
Powered by Claude AI