It's been a mediocre week for ACI Worldwide, Inc. (NASDAQ:ACIW) shareholders, with the stock dropping 16% to US$27.83 in the week since its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of US$1.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.6% to hit US$0.57 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, the most recent consensus for ACI Worldwide from four analysts is for revenues of US$1.49b in 2020, which is a solid 19% increase on its sales over the past 12 months. Statutory earnings per share are expected to leap 111% to US$1.22. In the lead-up to this report, analysts had been modelling revenues of US$1.49b and earnings per share (EPS) of US$1.22 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$42.00. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic ACI Worldwide analyst has a price target of US$44.00 per share, while the most pessimistic values it at US$40.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Further, we can compare these estimates to past performance, and see how ACI Worldwide forecasts compare to the wider market's forecast performance. Analysts are definitely expecting ACI Worldwide's growth to accelerate, with the forecast 19% growth ranking favourably alongside historical growth of 1.9% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 12% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that ACI Worldwide is expected to grow much faster than its market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$42.00, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for ACI Worldwide going out to 2021, and you can see them free on our platform here.
It might also be worth considering whether ACI Worldwide's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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