DOXNASDAQThe short version
Amdocs Limited
Amdocs sells the billing and customer-management software that runs the world's largest phone carriers; after a 47% share-price fall its cash engine looks intact, yet at $6.18B it sits below this framework's size line.
A quarter-century climb from under $20 to a $98.85 high in 2023, then a slide that cut the shares nearly in half — from $94 in June 2025 to a $49.87 low a year later.
Mkt cap $6.8BNet debt $682.7MEV $7.5BP/E FY27E 6.9×ND/EBITDA FY27E 0.6×
$55.28
Share price
$6.18B
Market cap
7.25%
Adj. FCF yield
−47%
Peak-to-trough drawdown
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Snapshot
Amdocs Limited in numbers
Price
$55.28as of 2026-07-30
Mkt cap
$6.8B
Net debt
$682.7M
EV
$7.5B
12m perf
−35.8%
3m ADV
$79.3M
| Year to Sep (USD) | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|
| Sales | 4.9B | 5.0B | 4.5B | 4.7B | 4.8B | 5.1B |
| EBITDA | 922.8M | 954.9M | 1.0B | 1.2B | 1.2B | 1.3B |
| EBIT | 724.9M | 759.7M | 812.2M | 966.3M | 1.0B | 1.0B |
| EBIT margin | 14.8% | 15.2% | 17.9% | 20.6% | 21.1% | 20.0% |
| EPS | 4.49 | 4.25 | 5.05 | 7.41 | 8.06 | 8.94 |
| EV/EBITDA | 8.1× | 7.9× | 7.5× | 6.3× | 6.2× | 5.8× |
| EV/EBIT | 10.4× | 9.9× | 9.3× | 7.8× | 7.4× | 7.3× |
| P/E | 12.3× | 13.0× | 10.9× | 7.5× | 6.9× | 6.2× |
| FCF yield | 10.2% | 9.1% | 9.4% | 9.5% | 10.8% | 12.8% |
| Gearing | 3.6% | 8.7% | 9.4% | – | – | – |
Consensus: S&P Capital IQ (CapIQ) · as of 2026-07-31Derived from run data; ratios use the latest price.
IThe business
Business
A single-segment software backbone for the world's phone carriers
FY2025 revenue by region
North America$3.0B66%
Europe$0.7B16%
Rest of world$0.8B19%
North America is ~66% of the top line.
- One business, one segment. Amdocs sells the billing, ordering and customer-management software plus the managed-services teams that run large phone carriers' back offices. FY2025 revenue was $4.53B.
- Recurring by design. About 66% of revenue is managed services that renew close to 100%, and booked-but-unbilled backlog stood near $6.4B — visibility years out.
- Asset-light. Capex roughly halved to about $104M in FY2025; the model throws off cash rather than consuming it.
Customers
Two carriers pay nearly half the bills
Customer concentration, FY2025
| Customer | % of revenue |
|---|---|
| AT&T | 25.9% |
| T-Mobile | 19.9% |
| All other customers | 54.2% |
- Concentrated demand. AT&T was 25.9% of FY2025 revenue and T-Mobile 19.9% — together nearly half the top line comes from two US carriers.
- Sticky, but budget-driven. T-Mobile re-signed a multi-year deal in Q1 FY2026 yet is still guided to lower spend: renewals hold even as carrier budgets shrink.
- Mature end market. Organic growth runs near 1.5%; roughly half of the ~3% headline growth is inorganic.
IIIThe story now
The fit
Outside the framework's universe (U2 not met); contested: P2
$6.18B
Market cap vs $10B line
7.25%
Adj. FCF yield vs 8.5% bar
0.69
Diagnosis: leans temporary
High
Confidence
- The size gate. At $55.28 the 111.7M shares are worth about $6.18B — roughly $3.8B under the framework's $10B floor. A sub-$10B name is out before any pillar can qualify it; all four jurors agreed.
- Drawn down, not structural. At the June-2025 peak of $94.08 the same share count implied about $10.5B, above the line — the miss is the ~47% drawdown, but the framework measures scale today.
- What's contested. P2 (cash-flow consistency) split: one model family read it as met, the other as cannot-determine — a window-length disagreement, not a factual dispute, and not a gate.
Market cap uses the FY2025 period-end share count; a different current count shifts $6.18B modestly, not to the $10B line.
Dislocation
The 47% fall came on two guidance days, not one panic
−7.9%
Day after Q4 FY2025 print
−8.6%
Day after Q1 FY2026 print
−47%
Peak to trough, 378 days
3.1x
Peak volume vs median
- Dated triggers. The Nov-11-2025 Q4 print set a soft FY2026 outlook and the stock fell ~7.9%; the Feb-3-2026 Q1 print fell ~8.6% even as revenue rose 4.1% and a T-Mobile renewal was signed.
- Force in the tape. Volume ran 3.1x the trailing median through the fall, with single-day spikes near 6.9x and 5.3x — selling with emotion, not a quiet drift.
- Counter-fact. The steepest leg, June 2026 to the $49.87 low, carried no dated company catalyst; news ties it only to sector-wide AI-disruption fear, so part reads as an orderly de-rating.
Diagnosis
Earnings rose while the share price nearly halved
Diluted EPS rose through the drawdown
- Inverted signature. Through the drawdown FY2025 earnings rose — GAAP diluted EPS +18.8% and non-GAAP +8.5% — while the multiple compressed. Price fell; earning power didn't.
- A deliberate break. The 9.4% reported revenue drop was a chosen phase-out of low-margin, non-core work; excluding it, revenue grew 3.1%. That anniversaries rather than compounds.
- Counter-fact. An adversarial trial put the impairment at 0.69 leans-temporary, but a DCF-lite at r=10% puts the market-implied FCF (~$618M) inside the permanent band — the gap exists only if temporary.
Durability
The ten-year durability test comes up just short
0.61
P1 year-10 conviction (gate: not met)
~66%
Revenue from recurring services
$940M
Consensus FY2029 FCFfrom $652M in FY2026
- Genuine durability. About 66% recurring revenue renewing near 100%, ~$6.4B backlog, an asset-light model, and consensus FCF modeled rising from $652M (FY2026) to $940M (FY2029).
- But not 'very high conviction.' Organic growth is ~1.5%, the core carrier market is mature, SaaS challengers attack the bespoke model, and ~46% of revenue sits in two carriers — the year-10 gate resolves not met.
- Counter-fact. A lower year-10 FCF is hard to picture: free cash flow held $530–698M through the disruption, and the ~3.3%/yr buyback keeps compounding per-share value even at ~3% growth.
Moat
A mature market and real challengers, but not a secular melt
Structural-decline read
| Signal | Reading |
|---|---|
| End market | Mature carrier IT, ~1.5% organic growth |
| Named as a rival | CSG Systems' FY2025 filing lists Amdocs directly |
| Valuation | ~1.4x FY2025 sales after the fall |
| Structural test (X3) | Not a hit — read as cyclical, not secular |
- Real pressure. The carrier-IT market is mature and SaaS challengers target the bespoke-integration model; a rival's FY2025 filing names Amdocs directly as a competitor.
- Not a melt. The structural-decline test came back not a hit — the jury read the softness as cyclical and self-inflicted (the phase-out), not a secular loss of share or pricing.
- Not consensus-hyped either. At about 1.4x FY2025 sales after a 47% fall with ~3% growth expected, this is the opposite of an extreme-multiple, saturated-growth story.
Self-help
A relentless buyback has retired a tenth of the shares
Diluted share count
- Executed, not promised. Buybacks were roughly $490–563M of actual cash a year — $2.11B across FY2022–FY2025 — shrinking diluted shares 9.6%, about 3.3% annually.
- Full payout. Repurchases plus dividends returned more than 100% of free cash flow into Q2 FY2026; the share-count-rising hard-fail test is negative.
- Counter-fact. Recent vintages were bought near $85–90 against a ~$55 quote, and continued capacity increasingly leans on a commercial-paper program launched March 2026, not current FCF.
Balance sheet
The balance sheet can outlast; the headroom is thinning
Cash and short-term investments
- Room to outlast. The only funded debt is a $650M senior note at 2.538% due June 2030; the $800M revolver runs to July 2029, undrawn and covenant-compliant, with investment-grade ratings intact.
- Headroom is thinning. Returning more than all its FCF drew cash and short-term investments from $514M (FY2024) to $325M (FY2025) to about $214M by March 2026.
- Class is drifting. Net debt was 0.35x EBITDA at FY2025 (fortress); by Q2 FY2026 it had risen toward ~0.7x (moderate), lifting the yield bar the company must clear.
IVThe price
Yield vs bar
Adjusted cash yield sits just below the fortress bar
Adjusted FCF yield vs the fortress bar
Raw FCF yield
10.4%
Adj. yield, 3-yr avg
7.5%
Adj. yield, current
7.2%
- Just under the bar. Hand-built adjusted FCF yield is 7.25% now and 7.48% on a three-year average, against the 8.5% fortress bar — short by roughly 100–125 basis points.
- The haircut does it. On the raw, unadjusted definition the yield is 10.4% and clears comfortably; it is the ~$197M stock-comp-plus-acquisition adjustment that pulls it under the line.
- Counter-fact. If the balance sheet keeps drifting to moderate, the bar rises to 10% and the gap widens.
Adjusted FCF = free cash flow minus stock-based comp minus a trailing five-year average of acquisition spend.
Forward path
Consensus has the yield clearing the bar by FY2027
Adjusted forward FCF yield
Crosses the 8.5% fortress bar in FY2027 on a static price.
- Consensus crosses in FY2027. Applying the same haircut to consensus FCF, adjusted forward yield runs 7.35% (FY2026), 8.74% (FY2027) and 10.94% (FY2028) — clearing the 8.5% bar with no re-rating.
- Mechanical on a flat price. The crossing rests on consensus FCF rising to $737M in FY2027 off a year revenue fell 9.4%; any upward re-rating would compress the yield back below the bar.
- Dividend adds to it. The payout yields ~3.8% (rising to ~4.1% on the proposed FY2026 step-up), took ~35% of FY2025 FCF, and carries roughly 3x forward cover.
The 3x test
A 3x from here would need about $18.5B
DCF-lite value vs the 3x target
- The target. A 3x in three years from $6.18B implies about $18.5B of value — the framework's yardstick, stated as arithmetic.
- The models don't reach it. A DCF-lite at r=10% caps the temporary case near $6.5–8.1B and the permanent case at $5.3–5.8B, below today's market value.
- What it would take. FCF compounding far faster than the temporary case assumes, and consensus conceding a full re-acceleration of the ~1.5% organic line.
What to watch
A cash-rich, buyback-heavy backbone in a real dislocation — but too small for this framework and short of its bars.
- 01revenue declines for a third consecutive year
- 02share count inflects upward
- 03AT&T or T-Mobile announces material insourcing/non-renewal of managed services
- 04free cash flow stays below $600 million for two consecutive fiscal years
This is the short version of a fixed framework test, built criterion by criterion across the report's evidence tabs.
Compiled from the full report · 2026-07-31 · For information, not investment advice.