ACI Worldwide (ACIW), mcap=$3.3bn, price $27.19 vs $26.80

– The payments software provider for large banks, intermediaries like $V and $MA, and large merchants.
– Undemanding valuation at 11x ’22 FCF.
– An incredibly sticky product with high switching costs.
– 5-year licenses with renewals typically above inflation rates.
– Strong growth potential from ancillary and adjacent products.
– The main one is software for real-time payments (RTP).
– With increased RTP adoption globally, $ACI could see explosive FCF growth in the coming years.

– Expected to generate $2.4/share in FCF (vs $1.82/share consensus).
– At conservative 15x FCF it’s at $30 stock.
– Potential for $50/share in strategic (e.g. $V) take-over scenario.

Exp. gain: +30% to $35/share

Full $ACIW write-up (free guest account required):

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