ACI Worldwide, Inc. (NASDAQ:ACIW), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on ACI Worldwide's outlook and valuation to see if the opportunity still exists.

What Is ACI Worldwide Worth?

Good news, investors! ACI Worldwide is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $71.52, but it is currently trading at US$53.41 on the share market, meaning that there is still an opportunity to buy now. What's more interesting is that, ACI Worldwide's share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of ACI Worldwide look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -4.4% expected over the next couple of years, near-term growth certainly doesn't appear to be a driver for a buy decision for ACI Worldwide. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although ACIW is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to ACIW, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you've been keeping an eye on ACIW for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. At Simply Wall St, we found 2 warning signs for ACI Worldwide and we think they deserve your attention.

If you are no longer interested in ACI Worldwide, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.