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Amdocs Limited (DOX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Amdocs Limited (DOX)

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Intrinsic Value (DCF)

Current$82.81
→
Intrinsic$100.35
+21%
$67.25$100.35$163.27
Market implies 4% growth for 5 years
DOX shows 21% potential upside using 8% growth — reasonable if fundamentals hold.
At $83, the market prices in only 4% growth — below historical 8%, suggesting low expectations.
Range: Bear $67 → Bull $163. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →4%6%8%10%
8%$120$131$143$156
10%$84$92$100$109
12%$64$70$77$83
14%$52$56$61$67

Bull Case

  • Bull case ($163) offers 97% upside at 10% growth, 9% discount
  • 17% margin of safety vs. base case estimate
  • Market-implied growth (4%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($67) implies 19% downside at 6% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$696.76M
Year 2$752.50M
Year 3$812.70M
Year 4$877.71M
Year 5$947.93M
Terminal$13.95B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$645.14MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is DOX stock undervalued or overvalued?
🟢 UNDERVALUED

DOX trades at $82.81 vs. our DCF-derived intrinsic value of $100.35, implying +22% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of DOX's future cash flows. The bear case ($71.45) still suggests upside, providing margin of safety.

What is DOX's intrinsic value?

Using a 5-year DCF model: Base FCF of $645M, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $501M net debt and dividing by 0.11B shares: Bear $71.45 | Base $100.35 | Bull $138.98. Current price $82.81 implies +22% to base case.

How is DOX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($11.71B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.