NEW YORK (TheStreet) -- Shares of ACI Worldwide (ACIW) are gaining 0.11% to $17.64 in early-market trading after BMO Capital initiated coverage on the company with an "outperform" rating and a $22 price target.
ACI Worldwide develops, markets, installs and supports a line of software products and services primarily focused on facilitating electronic payments.
Separately, TheStreet Ratings team rates ACI WORLDWIDE INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACI WORLDWIDE INC (ACIW) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, increase in stock price during the past year, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.2%. Since the same quarter one year prior, revenues rose by 36.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- ACI WORLDWIDE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACI WORLDWIDE INC increased its bottom line by earning $1.63 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.63).
- The gross profit margin for ACI WORLDWIDE INC is rather high; currently it is at 50.29%. Regardless of ACIW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ACIW's net profit margin of -2.60% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: ACIW Ratings Report