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On Monday, DA Davidson analyst Peter Heckmann upgraded ACI Worldwide (NASDAQ:ACIW) stock, trading on NASDAQ: ACIW, from Neutral to Buy while maintaining the price target at $60.00. The upgrade followed a notable decline in the company’s share price, currently trading at $46.56, with a sharp 14.65% drop in the past week alone. According to InvestingPro analysis, the stock appears undervalued at current levels, with multiple indicators suggesting growth potential. This decrease came despite ACI Worldwide reporting strong results in the first quarter.
Heckmann noted that the current trading level of ACI Worldwide’s shares, with an enterprise value of just under 11 times their 2026 adjusted EBITDA forecast, presents a more attractive risk/reward scenario. The analyst’s perspective is that the recent pullback in share price has created a favorable entry point for investors.
ACI Worldwide’s performance in the first quarter was robust, yet the market reaction saw the company’s shares experience a significant reduction in value. This juxtaposition of strong performance against a backdrop of declining share price was the catalyst for Heckmann’s rating upgrade.
The maintained price target of $60.00 by DA Davidson suggests a level of confidence in ACI Worldwide’s future financial performance. The target is predicated on the firm’s forecasted financial metrics, specifically the 2026 adjusted EBITDA.
Investors and market watchers will be keeping an eye on ACI Worldwide’s stock performance in the wake of this rating change. The endorsement from DA Davidson comes at a time when the company’s valuation metrics appear to be more appealing following the recent share price movements.
In other recent news, ACI Worldwide Inc. reported impressive financial results for the first quarter of 2025, surpassing market expectations. The company achieved an earnings per share of $0.51, significantly beating the predicted loss of $0.03, and generated revenue of $395 million, exceeding the anticipated $336.7 million. ACI Worldwide’s Payment Software (ETR:SOWGn) segment contributed to this success with a 42% increase in revenue. Despite these strong results, the company’s stock experienced a decline, which might reflect broader market trends or investor profit-taking. Additionally, ACI Worldwide has raised its full-year revenue guidance to a range of $1.690 billion to $1.720 billion, demonstrating confidence in its strategic initiatives. The company also launched Kinetic, a new cloud-native payments hub, aimed at expanding its addressable market. Furthermore, ACI Worldwide announced the sale of its non-controlling interest in Mindgate to PayU India, while maintaining a strategic partnership in the region. Lastly, CFO Scott Barron announced plans for his retirement, marking a transition in the company’s financial leadership.
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