ACI Worldwide, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a good week for ACI Worldwide, Inc. (NASDAQ:ACIW) shareholders, because the company has just released its latest yearly results, and the shares gained 3.6% to US$32.13. It looks like a credible result overall - although revenues of US$1.5b were in line with what the analysts predicted, ACI Worldwide surprised by delivering a statutory profit of US$1.12 per share, a notable 16% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for ACI Worldwide
Taking into account the latest results, the current consensus from ACI Worldwide's five analysts is for revenues of US$1.56b in 2024. This would reflect a modest 7.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 25% to US$1.42. Before this earnings report, the analysts had been forecasting revenues of US$1.55b and earnings per share (EPS) of US$1.28 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.
The consensus price target rose 11% to US$38.60, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic ACI Worldwide analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$38.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting ACI Worldwide's growth to accelerate, with the forecast 7.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, ACI Worldwide is expected to grow slower than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ACI Worldwide's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple ACI Worldwide analysts - going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for ACI Worldwide that we have uncovered.
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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.
