DOX
DOX
Strong Buy 2026-05-05
Model
DCF
Price at Report
$65.30
Base IV
$92.05
Bear IV
$76.27
Bull IV
$109.08
Entry Zone: 76-86 · Sell Above: 108
Bore Family Office
Valuation Report — Amdocs Limited (DOX) • May 5, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 9.00% • Current Price: $65.30
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Amdocs is a leading provider of software and services to communications, media, and entertainment companies. The company designs, implements, and manages digital transformation programs for major telecom operators worldwide, with AT&T historically representing over 10% of revenue. Headquartered in Jersey (incorporated) with principal operations in Israel, Amdocs employs approximately 43,000 people globally. The company has a 14-year consecutive dividend growth track record and systematically repurchases shares, returning significant capital to shareholders.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Managed Services | $2,050M | 45% | +3.0% | — | Long-term BSS/OSS outsourcing contracts with tier-1 telcos |
| Systems Integration & Consulting | $1,370M | 30% | +2.0% | — | Project-based digital transformation engagements |
| Software Licenses & Support | $915M | 20% | +4.0% | — | Recurring maintenance & licensed SW for telco platforms |
| Other | $230M | 5% | -5.0% | — | Directory & other legacy services |
| Blended Growth Rate | — | 100% | +2.5% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Capital Return: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 13.9% | ≥12% strong |
| FCF Margin | 16.5% | ≥10% strong |
| Debt / EBITDA | 1.0x | ≤2x conservative |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Expanding | Directional margin trajectory |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | TTM |
|---|---|---|---|---|---|---|
| Revenue ($M) | $4,289 | $4,577 | $4,888 | $5,005 | $4,533 | $4,579 |
| Rev YoY Growth | — | +6.7% | +6.8% | +2.4% | -9.4% | +1.0% |
| Gross Margin | 34.5% | 35.4% | 35.4% | 35.1% | 38.0% | 37.6% |
| EBITDA ($M) | $808 | $889 | $852 | $824 | $927 | $939 |
| EBITDA Margin | 18.8% | 19.4% | 17.4% | 16.5% | 20.5% | 20.5% |
| Operating Income ($M) | $599 | $665 | $654 | $629 | $732 | $740 |
| Operating Margin | 14.0% | 14.5% | 13.4% | 12.6% | 16.1% | 16.2% |
| Net Income ($M) | $688 | $550 | $543 | $496 | $568 | $574 |
| Net Margin | 16.0% | 12.0% | 11.1% | 9.9% | 12.5% | 12.5% |
| EPS (diluted) | $5.32 | $4.44 | $4.49 | $4.25 | $5.05 | $5.17 |
| Free Cash Flow ($M) | $715 | $530 | $698 | $619 | $645 | $755 |
| Annual DPS | $1.407 | $1.545 | $1.700 | $1.872 | $2.060 | $2.108 |
| Total Debt ($M) | $881 | $827 | $807 | $690 | $826 | $952 |
💹 Capital Return & Share Count Analysis
Net Share Change
-16.0% (FY2021→TTM)
📉 Net reduction — buybacks exceed issuances
EPS Amplification
EPS grew -2.8% vs net income -16.6% over the period — +13.7pp of EPS growth amplified by share reduction.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| FY2021 | 128.0M | — | $-680 | -8.1% |
| FY2022 | 122.0M | -4.7% | $-508 | -6.4% |
| FY2023 | 118.0M | -3.3% | $-490 | -6.4% |
| FY2024 | 114.0M | -3.4% | $-563 | -7.6% |
| FY2025 | 110.0M | -3.5% | $-551 | -7.7% |
| TTM | 107.6M | -2.2% | $-553 | -7.9% |
DOX has reduced shares from 128M (FY21) to 107.6M (TTM) — a 16% reduction in 5 years. Consistent buybacks at ~$500-680M/year. Combined with 14-year dividend growth streak and 7.93% shareholder yield, capital return is a core thesis.
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.35% | 10-yr US Treasury yield |
| Beta (β) | 0.602 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 4.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 9.56% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 5.25% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 4.33% | × (1 − 18%) |
| Weight Equity (We) | 88.1% | Mkt cap $0.0B |
| Weight Debt (Wd) | 11.9% | Gross debt $0.0B |
| WACC | 9.00% | DCF discount rate |
📈 DCF Scenarios
$76
🔴 Bear
$92
📊 Base
$109
🚀 Bull
$65.30
Current Price
$92
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 2.0% | 1.0% | 1.5% | 9.00% | $76 | ▲16.8% |
| 📊 Base | 4.5% | 2.0% | 2.0% | 9.00% | $92 | ▲41.0% |
| 🚀 Bull | 6.5% | 3.0% | 2.5% | 9.00% | $109 | ▲67.0% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 2.0% | Stage 2: 1.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.67B | $0.61B | $0.61B |
| Year 2 | Stage 1 | $0.68B | $0.57B | $1.18B |
| Year 3 | Stage 1 | $0.69B | $0.54B | $1.72B |
| Year 4 | Stage 1 | $0.71B | $0.50B | $2.22B |
| Year 5 | Stage 1 | $0.72B | $0.47B | $2.69B |
| Year 6 | Stage 2 | $0.73B | $0.43B | $3.13B |
| Year 7 | Stage 2 | $0.74B | $0.40B | $3.53B |
| Year 8 | Stage 2 | $0.74B | $0.37B | $3.90B |
| Year 9 | Stage 2 | $0.75B | $0.35B | $4.25B |
| Year 10 | Stage 2 | $0.76B | $0.32B | $4.57B |
| Terminal | — | TV=$10.3B | PV(TV)=$4.3B (49% of EV) | EV=$8.9B |
| Intrinsic Value | — | — | EV $8.9B − Net Debt → Equity / Shares | $76 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.00%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $10.3B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $4.3B). Enterprise Value = PV of FCFs ($4.6B) + PV of TV ($4.3B) = $8.9B. Subtracting net debt gives equity value of $8.2B, divided by shares outstanding = $76 per share.
Base Scenario
Stage 1: 4.5% | Stage 2: 2.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.68B | $0.63B | $0.63B |
| Year 2 | Stage 1 | $0.71B | $0.60B | $1.23B |
| Year 3 | Stage 1 | $0.75B | $0.58B | $1.80B |
| Year 4 | Stage 1 | $0.78B | $0.55B | $2.36B |
| Year 5 | Stage 1 | $0.82B | $0.53B | $2.89B |
| Year 6 | Stage 2 | $0.83B | $0.50B | $3.38B |
| Year 7 | Stage 2 | $0.85B | $0.46B | $3.85B |
| Year 8 | Stage 2 | $0.87B | $0.43B | $4.28B |
| Year 9 | Stage 2 | $0.88B | $0.41B | $4.69B |
| Year 10 | Stage 2 | $0.90B | $0.38B | $5.07B |
| Terminal | — | TV=$13.1B | PV(TV)=$5.5B (52% of EV) | EV=$10.6B |
| Intrinsic Value | — | — | EV $10.6B − Net Debt → Equity / Shares | $92 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.00%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $13.1B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $5.5B). Enterprise Value = PV of FCFs ($5.1B) + PV of TV ($5.5B) = $10.6B. Subtracting net debt gives equity value of $9.9B, divided by shares outstanding = $92 per share.
Bull Scenario
Stage 1: 6.5% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.70B | $0.64B | $0.64B |
| Year 2 | Stage 1 | $0.74B | $0.62B | $1.26B |
| Year 3 | Stage 1 | $0.79B | $0.61B | $1.87B |
| Year 4 | Stage 1 | $0.84B | $0.60B | $2.47B |
| Year 5 | Stage 1 | $0.90B | $0.58B | $3.05B |
| Year 6 | Stage 2 | $0.92B | $0.55B | $3.60B |
| Year 7 | Stage 2 | $0.95B | $0.52B | $4.12B |
| Year 8 | Stage 2 | $0.98B | $0.49B | $4.61B |
| Year 9 | Stage 2 | $1.01B | $0.46B | $5.08B |
| Year 10 | Stage 2 | $1.04B | $0.44B | $5.52B |
| Terminal | — | TV=$16.4B | PV(TV)=$6.9B (56% of EV) | EV=$12.4B |
| Intrinsic Value | — | — | EV $12.4B − Net Debt → Equity / Shares | $109 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.00%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $16.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $6.9B). Enterprise Value = PV of FCFs ($5.5B) + PV of TV ($6.9B) = $12.4B. Subtracting net debt gives equity value of $11.7B, divided by shares outstanding = $109 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.0% | $124 | $132 | $142 | $155 | $171 |
| 7.5% | $113 | $119 | $127 | $137 | $149 |
| 8.0% | $103 | $109 | $115 | $123 | $132 |
| 8.5% | $95 | $100 | $105 | $111 | $118 |
| 9.0% | $88 | $92 | $96 | $101 | $107 |
| 9.5% | $82 | $85 | $89 | $93 | $98 |
| 10.0% | $77 | $80 | $83 | $86 | $90 |
| 10.5% | $72 | $74 | $77 | $80 | $83 |
| 11.0% | $68 | $70 | $72 | $74 | $77 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | FCF Margin | Rev Growth |
|---|---|---|---|---|---|---|---|
| Amdocs | DOX | 12.4× | 9.4× | 9.3× | 3.5% | 16.5% | -6.0% |
| Accenture | ACN | 27.8× | 21.2× | 24.1× | 1.5% | 12.8% | +6.5% |
| Cognizant | CTSH | 16.8× | 12.3× | 15.6× | 1.7% | 10.1% | -1.2% |
| Infosys | INFY | 22.4× | 16.8× | 19.3× | 2.5% | 15.2% | +3.8% |
| Wipro | WIT | 19.2× | 13.5× | 17.8× | 2.1% | 9.8% | -3.5% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.280 |
| Current Yield | 3.49% |
| Consecutive Growth Years | 14 |
| 1-yr DPS CAGR | +10.7% |
| 3-yr DPS CAGR | +6.8% |
| 5-yr DPS CAGR | +10.5% |
| 10-yr DPS CAGR | +10.7% |
| Payout Ratio (DPS/EPS) | 41.6% |
| FCF Payout Ratio | 32.5% |
| Sustainability Verdict | Safe — low payout, strong FCF generation |
Amdocs' 14-year dividend growth streak is well-supported by a 41.6% payout ratio and 32.5% FCF payout. The company generates ample free cash flow to sustain and grow the dividend while continuing its aggressive buyback program. Dividend safety is not a concern at current earnings levels.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $5.32 | — | — | — | Actual |
| 2022 | $4.44 | — | — | — | Actual |
| 2023 | $4.49 | — | — | — | Actual |
| 2024 | $4.25 | — | — | — | Actual |
| 2025 | $5.05 | — | — | — | Actual |
| 2026 | $7.25 | $7.54 | $7.91 | — | Estimate |
| 2027 | $7.88 | $8.18 | $8.64 | — | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $4.3B | — | — | — | Actual |
| 2022 | $4.6B | — | — | — | Actual |
| 2023 | $4.9B | — | — | — | Actual |
| 2024 | $5.0B | — | — | — | Actual |
| 2025 | $4.5B | — | — | — | Actual |
| 2026 | $4.6B | $4.7B | $4.9B | — | Estimate |
| 2027 | $4.7B | $4.9B | $5.2B | — | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Tavy Rosner | Barclays | Buy | $92 | +40.9% |
| Shlomo Rosenbaum | Stifel | Strong Buy | $88 | +34.8% |
💡 Investment Thesis
- Deep telco moat: Amdocs' BSS/OSS systems are deeply embedded in tier-1 operators' critical infrastructure — switching costs are extreme, and the company's 30+ year relationships with AT&T, Verizon, and other majors create formidable barriers to entry.
- Shareholder yield powerhouse: At 7.93% shareholder yield (3.49% dividend + 4.44% buyback), DOX returns nearly 8 cents on every dollar of market cap annually — a compelling income-plus-growth combination for patient capital.
- AI monetization runway: Amdocs is embedding generative AI across its product suite (Amdocs amAIz), with potential to accelerate CSPs' digital transformation and expand the addressable market into cloud-native and 5G monetization.
- Valuation disconnect: Trading at 12.4× TTM P/E and 8.3× forward P/E with a 41% upside to analyst consensus — the market is pricing in a secular decline that the company's recurring revenue model and contract backlog don't support.
- Risk factor — customer concentration: AT&T represents >10% of revenue; any disruption in this relationship or telecom capex slowdown poses downside risk. The FY25 revenue decline of -9.4% reflects this cyclicality.
👔 Management Quality & Culture
CEO: How Amdocs
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Board of Directors | Amdocs
Hortig has more than two decades of experience in the technology and telecommunications industry and has held a series of senior corporate, finance and business leadership roles with increasing responsibility during his ten
Hortig has more than two decades of experience in the technology and telecommunications industry and has held a series of senior corporate, finance and business leadership roles with increasing responsibility during his ten
Amdocs - Wikipedia
Together with others at Golden Pages, Kahn developed a billing software program for phone directory companies and with Boaz Dotan established a company called Aurec Information & Directory Systems to market this product. In 1982
Together with others at Golden Pages, Kahn developed a billing software program for phone directory companies and with Boaz Dotan established a company called Aurec Information & Directory Systems to market this product. In 1982
List of Amdocs Executives & Org Chart | Clay
Her expertise in finance and operations ... Rapaport-Dagim's professional journey at Amdocs began in 2004 as Vice President of Finance, later becoming Chief Financial Officer in 2007, and eventually taking on the dual role of C
Her expertise in finance and operations ... Rapaport-Dagim's professional journey at Amdocs began in 2004 as Vice President of Finance, later becoming Chief Financial Officer in 2007, and eventually taking on the dual role of C
Capital Allocation & Strategy
Investor Relations | Amdocs
The Investor Relations website contains information about Amdocs's business for stockholders, potential investors, and financial analysts.
The Investor Relations website contains information about Amdocs's business for stockholders, potential investors, and financial analysts.
First Quarter Results for Fiscal 2025 | Amdocs
Second quarter non-GAAP diluted EPS guidance excludes primarily equity-based compensation expense of approximately $0.20-$0.22 per share, amortization of purchased intangible assets and other acquisition-related costs of approximately $0.12
Second quarter non-GAAP diluted EPS guidance excludes primarily equity-based compensation expense of approximately $0.20-$0.22 per share, amortization of purchased intangible assets and other acquisition-related costs of approximately $0.12
Employee Ratings
Overall Rating
3.7/5 ★★★★☆
Reviews
922
Culture Signal
Mixed
✅ Strengths
- work-life balance
- recommend
⚠️ Concerns
- layoffs
- cuts
Employee Review Excerpts
Amdocs Reviews in US | Glassdoor
Oct 21, 2025 · Software development specialist · Current employee · Dallas, TX · Recommend · CEO approval · Business Outlook · Pros · Great benefits like medical insurance, unlimited pto · Cons · Micro management, budget cuts , layoffs are
Oct 21, 2025 · Software development specialist · Current employee · Dallas, TX · Recommend · CEO approval · Business Outlook · Pros · Great benefits like medical insurance, unlimited pto · Cons · Micro management, budget cuts , layoffs are
Amdocs Reviews (13,002): Pros & Cons of Working At Amdocs |
Amdocs has an employee rating of 3.7 out of 5 stars, based on 13,002 company reviews on Glassdoor which indicates that most employees have a good working experience there.
Amdocs has an employee rating of 3.7 out of 5 stars, based on 13,002 company reviews on Glassdoor which indicates that most employees have a good working experience there.
Working at Amdocs: 480 Reviews | Indeed.com
480 reviews from Amdocs employees about Amdocs culture, salaries, benefits, work-life balance, management, job security, and more.
480 reviews from Amdocs employees about Amdocs culture, salaries, benefits, work-life balance, management, job security, and more.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Strong Buy — Amdocs Limited (DOX)
Current price: $65.30 | Analyst Avg PT: $92.33
$76
🔴 Bear
$92
📊 Base
$109
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$86 | Begin position |
| Tier 2 — Add | ≤$81 | Add on weakness |
| Tier 3 — Full | ≤$76 | Full allocation |
| Sell Alert | ≥$108 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Strong Buy. At $65.30, DOX trades at a 41% discount to the base-case intrinsic value of $92 and well below the bear-case floor of $76. The market has over-discounted temporary revenue softness and telecom capex concerns, creating an unusually favorable risk/reward setup for a business with 14 years of consecutive dividend growth, systematic buybacks, and deep competitive moats. Tier 1 begins at or below $86, with full allocation reserved for $76 or better.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 2,565.86 |
| Average Cost Basis | $81.26 |
| Current Market Value | $167,551 |
| Unrealized P&L | $-40,951 (-19.6%) |
| Annual DPS | $2.280/yr |
| Annual Dividend Income | $5,850/yr |
| Current Yield (at price) | 3.49% |
| Yield on Cost | 2.81% |
| vs Target (~$200K) | $167,551 / $200,000 (84%) |
🔧 Model Notes & Calibration
DCF uses normalized average FCF of $654.1M (3-year average FY23-25) rather than TTM $754.9M, which was inflated by working capital swings. WACC of 9.0% includes Blume-adjusted beta (0.406→0.602) plus 100bps FPI/geopolitical risk premium reflecting Israeli incorporation and principal operations. Base-case growth (4.5% Stage 1) aligns with analyst consensus FY26-27 revenue growth of 4.5-3.8%. The 41% upside to current price reflects a deep market discount that is not supported by fundamentals — all three covering analysts rate Buy/Strong Buy with PTs of $88-$97. Customer concentration (AT&T >10% of revenue) and telecom capex cyclicality are the key downside risks.
Bore Family Office • Analysis generated by Lurch • Not investment advice.