Duck Creek Technologies, Inc. (DCT) DCF Valuation & Fundamental Primer
Duck Creek Technologies, Inc. (DCT) currently trades at $18.99 with an enterprise value of $2.53B. Our proprietary institutional model rates Duck Creek Technologies, Inc. at 88/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of 18.4% vs. historical growth of 19.5% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Duck Creek Technologies, Inc. (DCT) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Duck Creek Technologies, Inc. (DCT) 3-Scenario DCF Valuation Range
Stress-test DCT's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $18.99).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $21.96 +16% | $23.31 +23% | $24.89 +31% | $26.76 +41% | $29.00 +53% |
| 9.3% | $19.76 +4% | $20.83 +10% | $22.05 +16% | $23.47 +24% | $25.14 +32% |
| 10.0% | $17.95 -5% | $18.81 -1% | $19.78 +4% | $20.89 +10% | $22.17 +17% |
| 10.8% | $16.44 -13% | $17.14 -10% | $17.93 -6% | $18.82 -1% | $19.83 +4% |
| 11.5% | $15.16 -20% | $15.74 -17% | $16.39 -14% | $17.11 -10% | $17.92 -6% |
Institutional Software Quality Scorecard (88/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 220% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 77.1% gross margin and 46.8% Rule of 40 score
- Net cash positive: $102.7M balance sheet buffer
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into DCT?
Market implies 18.4% annual revenue growth over next 5 years (29.2% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (14.5% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 29.2% 5-year revenue CAGR to justify $18.99/sh on a true per-share economic cash flow basis.
Duck Creek Technologies, Inc. (DCT) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $341.0M | $341.0M | $407.5M | $487.0M | $582.0M | $695.5M | $831.1M |
| Gross Profit | $262.9M | $262.9M | $314.2M | $375.5M | $448.7M | $536.2M | $640.8M |
| Operating Income (EBIT) | $42.3M | $42.3M | $50.5M | $60.4M | $72.2M | $86.2M | $103.1M |
| Stock-Based Compensation (SBC) | $49.5M | $49.5M | $59.1M | $70.6M | $84.4M | $100.8M | $120.5M |
| Unlevered Free Cash Flow (FCF) | $93.1M | $93.1M | $111.3M | $133.0M | $158.9M | $189.9M | $226.9M |
| SBC-Adjusted True Cash Flow | $43.7M | $43.7M | $52.2M | $62.3M | $74.5M | $89.0M | $106.4M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -31.2 + 0.83 × (Rule of 40) · R² = 81%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Duck Creek Technologies, Inc. | DCT | $2.52B | $341.0M | 77.1% | 27.3% | 46.8% | 14.5% | 7.1× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 7.1× | $2.42B | $2.52B | $18.99 | 0.0% |
| -20% Multiple Compression | 5.7× | $1.94B | $2.04B | $15.35 | -20.0% |
| -35% Multiple Compression | 4.6× | $1.57B | $1.68B | $12.61 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $1.71B | $1.81B | $13.60 | -29.6% |
Frequently Asked Questions: Duck Creek Technologies, Inc. (DCT) Valuation
What is Duck Creek Technologies, Inc. (DCT)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Duck Creek Technologies, Inc. (DCT) has a Base Case implied value of $19.78 per share (with a Bear Case of $9.06 and a Bull Case of $34.57), compared to its current price of $18.99. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Duck Creek Technologies, Inc. (DCT)'s Rule of 40 score and Free Cash Flow margin?
Duck Creek Technologies, Inc. achieves a Rule of 40 score of 46.8%, combining a 19.5% revenue growth run-rate with a 27.3% TTM free cash flow margin on $341.0M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into DCT stock according to Reverse-DCF analysis?
At $18.99 per share (Enterprise Value of $2.42B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 18.4%, compared to Duck Creek Technologies, Inc.'s historical CAGR of 19.5%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Duck Creek Technologies, Inc. compare to Software & Cloud Services software peers?
Duck Creek Technologies, Inc. (DCT) earns an institutional Software Quality Score of 88/100 (Grade A+ — Elite SaaS Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Duck Creek Technologies, Inc. (DCT)'s valuation?
Duck Creek Technologies, Inc. recorded $49.5M in TTM stock-based compensation (14.5% of revenue). When treating SBC as a cash-equivalent compensation expense, Duck Creek Technologies, Inc.'s SBC-adjusted free cash flow yield is 1.7%, scoring 16/25 on our Shareholder Dilution Friction pillar.