AMDOCS LIMITED (DOX): what the price requires
The current priced-in claim for AMDOCS LIMITED (DOX) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/DOX
Headline
| Field | Value |
|---|---|
| Ticker | DOX |
| Company | AMDOCS LIMITED |
| Current price | $52.77/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 3.8% |
| Operating margin today | 12.6% |
| Margin compression implied | -8.8pp |
| Multiple paid | 10x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~-4.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.20σ |
| cohort percentile (of 178 peers) | 8 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.99x | 5 | justifies |
| Earnings | 1.00x | 5 | justifies |
| Relative | 0.45x | 5 | justifies |
| Growth | 1.08x | 4 | expensive |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $113.56 | 0.46x | yes | FCF base $0.6B, growth 5% (input: historical growth), terminal g 4.0%, WACC 8.6%, 5yr projection |
| DCF Exit Multiple | Growth | $63.63 | 0.83x | yes | Exit EV/EBITDA: 6.6x / 8.6x / 10.6x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $116.56 | 0.45x | yes | P/E 25.94x (blended: static sector reference 35x + trailing (TTM) 12x), scenarios: 21.8x / 25.9x / 30.0x (bear / base = reference held flat / bull), EV/EBITDA 18.45x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $36.26 | 1.46x | yes | Stage 1: 6% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $46.17 | 1.14x | yes | BV/sh $29.93, ROE (TTM) 14.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $56.72 | 0.93x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $39.88 | 1.32x | yes | Rev $5.0B, growth 5% (input: historical growth; tapered), Terminal P/S: 1.0x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $51.00 | 1.03x | yes | EPS $4.25, growth 6% (input: historical EPS growth), PEG=2.18 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $52.59 | 1.00x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.67B × (1−16%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $58.49 | 0.90x | yes | BV $29.93 + 5yr PV of (ROE (TTM) 14.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $53.50 | 0.99x | yes | √(22.5 × EPS $4.25 × BVPS $29.93) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $160.12 | 0.33x | yes | EBITDA $0.76B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $54.10 | 0.98x | yes | FCF $618.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $44.31 | 1.19x | yes | SBC-adj FCF $0.51B (FCF $0.62B − SBC $0.10B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $70.59 | 0.75x | yes | EPS $4.25 × (8.5 + 2×5.7%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $47.02 | 1.12x | yes | BV $29.93 × (ROIC 13.5% / WACC 8.6%) |
| P/Sales Sector | Relative | $346.70 | 0.15x | yes | Revenue $5.00B × sector P/S 8.0x |
| PEG Fair Value | Relative | $36.08 | 1.46x | yes | EPS $4.25 × (PEG 1.5 × growth 5.7% (input: historical EPS growth)) → PE 8.5x |
| Earnings Yield | Earnings | $45.95 | 1.15x | yes | EPS $4.25 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $132.0m |
| Net debt / NOPAT (after-tax) | 0.25x |
| Net debt / operating income (pre-tax) | 0.21x |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At $51.48 the price pays roughly ten times company-wide operating income, a level the inversion flags as below-floor, meaning the market is pricing in operating-profit decline rather than asking whether Amdocs can grow.
The fundamentals point the other way: fiscal Q2 2026 revenue rose 3.9% to $1.172 billion, backlog reached $4.28 billion, free cash flow runs near $619 million, and net debt is a token $132 million against 26.5 times interest coverage.
The real risk is concentration and pace, not the balance sheet: revenue is tied to a short list of large telecom carriers, full-year growth is guided to 2% to 4%, and most of the 5% to 7% EPS growth comes from a steadily shrinking share count.
Bull Case
Start with the fear, because that is what the price is built around. The worry is that Amdocs is a slow-growing IT vendor tied to telecom carriers that are themselves cutting spend, a business whose revenue creeps along at low single digits while the world rotates toward faster software. At $51.48 (June 27, 2026) the market has taken that worry to its logical end. Strip the price down to operating economics and it pays roughly ten times company-wide operating income, a multiple so low it sits below what even a 5% annual decline in operating profit would justify. The price is not asking whether Amdocs can grow. It is betting the profit base shrinks from here.
The reported numbers do not support that bet. Fiscal Q2 2026 revenue was $1.172 billion, up 3.9% as reported, and the twelve-month backlog rose to $4.28 billion, up 2.6% year over year. That is not a business in decline; it is a business growing at the pace it has long delivered. The cash conversion is the harder part for the bears to wave away. Free cash flow runs near $619 million, interest coverage sits at 26.5 times, and net debt is a token $132 million against half a billion in liquid assets. A company with deteriorating economics does not throw off that kind of cash or carry that little net leverage.
What management does with the cash is the third leg. The share count has shrunk at roughly 3.5% a year, so every dollar of that steady operating profit is spread over fewer shares each year, which is the quiet engine behind the reiterated 5% to 7% non-GAAP EPS growth even as revenue grows in the low single digits. Layer on the gen-AI platform push (the aOS operating system aimed at putting Amdocs deeper inside carrier operations) and the modernization deals that came with it, and the case is not that Amdocs reinvents itself. It is that a durable, cash-generative incumbent priced for shrinkage simply keeps doing what it does.
Bear Case
The balance sheet is the wrong place to attack Amdocs, and that is exactly why the bear case has to start there and move on quickly. Net debt is $132 million against $514 million of liquid assets, interest coverage is 26.5 times, and the share count is falling. There is no leverage stress, no liquidity trap, no covenant cliff that turns a soft year into a solvency event. Whatever goes wrong here goes wrong slowly and in the income statement, not on the balance sheet. So the real fragility is concentration and pace, not capital structure.
The concentration is structural. Amdocs sells billing, monetization, and operations software to a short list of very large communications carriers, and when those customers consolidate or in-source, there is no second engine to lean on. Peers in the same cohort have at least diversified the demand base: Cognizant frames its growth around clients' need for AI adoption, modernization, and the build-out of agentic ecosystems across industries [CTSH FY2025 10-K, accession 0001058290-26-000008], and EPAM spreads revenue across verticals with financial services its largest at 24.1% of the total [EPAM FY2025 10-K, accession 0001352010-26-000015]. Amdocs does not have that spread. Its fortunes track a handful of telecom budgets, and telecom capital budgets are not growing.
The pace problem is the one the price actually cares about. Management tightened full-year guidance to 2% to 4% constant-currency revenue growth and held EPS growth at 5% to 7%, and most of that EPS growth is buybacks rather than the underlying business expanding. The gen-AI platform story is real but unproven as a revenue driver; the same modernization wave that is supposed to lift Amdocs can just as easily compress its margins as carriers demand the automation savings for themselves. A business growing revenue at 3% with EPS leaning on share count is not a falling knife, but it is also not the kind of name that re-rates on its own. It needs the market to decide the shrinkage thesis was wrong, and that is a slow decision.
Valuation
The build of $51.48 is unusually well supported from below. Inverted to operating economics, the price implies a roughly 10 times multiple on company-wide operating income, which the inversion flags as below-floor: the price sits under what even a 5% per year decline in operating profit would warrant. The priced-in assumption reads as within range against the company's own history, with the stretch (if any) in how long the modest pace must persist, not in the rate itself.
The method X-ray says the same thing from a different angle. Across nineteen applicable models the asset and earnings families cluster close to and slightly above today's price: Earnings Power Value at $52.68 (the zero-growth earnings anchor), FCF Yield at $54.10, Graham Number at $53.50, and ROIC-Justified book at $47.10. The two-stage excess-return model, the blended anchor, lands at $56.72. The methods that print far above price are the ones that lean on sector multiples (Relative Valuation at $116, EV/EBITDA Relative at $160, P/Sales Sector at $347), and those say less about Amdocs than about how richly the broader software sector trades. When the conservative, business-anchored methods sit at or above the price and only the multiple-driven ones stretch high, the read is a value-supported name rather than a growth bet.
The one number to handle carefully is operating income itself. Two measurement bases diverge here, an EDGAR trailing figure and the record basis the inversion prices, so the cleaner reads are the cash and per-share economics: about $619 million of free cash flow, a falling share count, and a price that pays for the business as if it were quietly fading rather than steadily compounding.
Catalysts
The near-term catalyst set is dominated by a leadership turnover and a platform bet. Amdocs reported fiscal Q2 2026 (quarter ended March 2026) results in mid-May: revenue of $1.172 billion, up 3.9% as reported and 2.2% in constant currency, with non-GAAP diluted EPS of $1.78, above the $1.73 to $1.79 guidance midpoint, and non-GAAP operating margin of 21.5%. GAAP EPS came in lower at $1.28 as restructuring and other items weighed on the period. Management tightened full-year fiscal 2026 guidance to 2% to 4% constant-currency revenue growth (2.6% to 4.6% as reported) and reiterated roughly 6% non-GAAP EPS growth within a narrowed 5% to 7% band.
The governance changes are the watch items. A long-planned CEO handover took effect at the end of March 2026, and a CFO succession was executed with Tal Rosenfeld named incoming CFO following Tamar Rapaport-Dagim's retirement after nearly two decades. New leadership inheriting both the gen-AI platform roadmap and the capital-allocation program means the next two earnings calls will signal whether product focus, M&A appetite, or the pace of buybacks shifts. The aOS gen-AI operating system aimed at telecom and the wave of cloud and AI modernization deals are the growth narrative to track; whether those deals add revenue or simply defend the installed base is the question the upcoming quarters will start to answer.
Analyst sentiment has cooled on multiple, not on the business. Price targets were trimmed toward the low-$80s to low-$90s from higher levels, with the cuts attributed to lower sector P/E multiples rather than to a downgrade of Amdocs' own execution, and the consensus rating remains constructive.
Sources: https://www.fool.com/earnings/call-transcripts/2026/05/13/amdocs-dox-q2-2026-earnings-transcript/ , https://www.stocktitan.net/sec-filings/DOX/6-k-amdocs-ltd-current-report-foreign-issuer-79e11aadceda.html , https://tickeron.com/earnings/DOX/ , https://www.sahmcapital.com/news/content/a-look-at-amdocs-dox-valuation-after-softer-2026-guidance-and-ceo-succession-plan-2026-02-08 , https://public.com/stocks/dox/forecast-price-target
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- WIT (WIPRO LIMITED)
- (no filing in the citation store)
- CTSH (COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION)
- FY2025 10-K: , Capgemini, CGI, Deloitte Digital, DXC Technology, EPAM Systems, Genpact, HCL Technologies, IBM Consulting, Infosys Technologies, Tata Consultancy Services and Wipro. In addition, we compete with numerous smaller local companies in the various geographic markets in which we operate. For additional information, see…
- FY2025 10-K: …our business and costs of operations. As a developing country, India has experienced and may continue to experience high inflation and wage growth, fluctuations in gross domestic product growth and volatility in currency exchange rates, any of which could materially adversely affect our cost of operations.…
- EPAM (EPAM SYSTEMS, INC.)
- FY2025 10-K: …operations. If we are unable to compete successfully against others in our industry, pricing pressures or loss of market share could have a material adverse effect on our business. The market for our services is highly competitive and we expect competition to persist and intensify, especially as we and our…
- FY2025 10-K: …in the Fortune 1000 and to be included as a leader in the IDC MarketScapes for Worldwide Experience Build Services and Worldwide Experience Design Services. Competition The markets in which we compete are changing rapidly and we face competition from multiple market participants such as other global technology…
- KD (Kyndryl Holdings, Inc.)
- FY2025 10-K: …and integrate such innovations with sufficient speed and versatility, we could fail in our ongoing efforts to maintain and increase our revenue and profit margins, achieve and sustain our targeted growth rates or improve our market share, operating margins and competitive position generally or in specific markets or…
- FY2025 10-K: …compared to the year ended March 31, 2023, including a favorable currency exchange rate impact of three points. The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $158 million from the prior year,…
- DXC (DXC Technology Co)
- FY2025 10-K: …variations do not materially affect our long-term performance, they may contribute to periodic fluctuations in revenue, expenses, and profitability. We continue to monitor these trends and adjust our operations as needed to optimize performance throughout the year. Competition The IT and professional services markets…
- FY2025 10-K: …alliance partners, our business and results of operations could be adversely affected. We face aggressive price competition and may have to lower prices to stay competitive, while simultaneously seeking to maintain or improve revenue and gross margin. This price competition may continue to increase from emerging…
- IBM (INTERNATIONAL BUSINESS MACHINES CORP)
- FY2025 10-K: …33.1 % 32.1 % 1.0 pts. Software gross profit margin of 83.5 percent in 2025 decreased 0.2 points compared to the prior year. Segment profit of $9,920 million increased 14.2 percent and segment profit margin of 33.1 percent increased 1.0 points compared to the prior year. The year-to-year increases in segment profit…
- FY2025 10-K: …revenue percent change for Strategy and Technology and Intelligent Operations. These changes did not impact our Consolidated Financial Statements or our reportable segments. The following table presents each reportable segment's revenue and gross margin results, followed by an analysis of the 2025 versus 2024…
- LDOS (Leidos Holdings, Inc.)
- FY2025 10-K: …acquisitions of businesses or establish teaming or other agreements among themselves or third parties, which could allow them to offer more competitive and comprehensive solutions. As a result of such acquisitions or arrangements, our current or potential competitors may be able to accelerate the adoption of new…
- FY2025 10-K: …revenues and growth prospects. Our business is highly competitive, and we compete with larger companies with greater name recognition, financial resources, and a larger technical staff. We also compete with smaller, more specialized companies that can concentrate their resources on particular areas. Additionally, we…
- SAIC (Science Applications International Corporation)
- FY2025 10-K: …Condition and Results of Operations" in Part II, Item 7 of this report. Competition Competition for contracts is intense, and we often compete against a large number of established multinational companies, which may have greater name recognition, financial resources and larger technical staffs than we do. We also…
- FY2025 10-K: …more profitable. Changes in cost of revenues as a percentage of revenues other than from revenue volume or cost mix are normally driven by fluctuations in shared or corporate costs, or cumulative revenue adjustments due to changes in estimates. Changes in operating cash flows are described with regard to changes in…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.