EVO Payments, Inc. (EVOP) DCF Valuation & Fundamental Primer
EVO Payments, Inc. (EVOP) currently trades at $33.99 with an enterprise value of $4.12B. Our proprietary institutional model rates EVO Payments, Inc. at 88/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of 6.6% vs. historical growth of 16.0% (Substantial Margin of Safety).
Institutional fundamental teardown of EVO Payments, Inc. (EVOP) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
EVO Payments, Inc. (EVOP) 3-Scenario DCF Valuation Range
Stress-test EVOP'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: $33.99).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $54.07 +59% | $57.36 +69% | $61.19 +80% | $65.72 +93% | $71.16 +109% |
| 9.3% | $48.72 +43% | $51.31 +51% | $54.28 +60% | $57.73 +70% | $61.78 +82% |
| 10.0% | $44.33 +30% | $46.41 +37% | $48.77 +43% | $51.46 +51% | $54.57 +61% |
| 10.8% | $40.65 +20% | $42.35 +25% | $44.26 +30% | $46.41 +37% | $48.87 +44% |
| 11.5% | $37.53 +10% | $38.94 +15% | $40.51 +19% | $42.26 +24% | $44.24 +30% |
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 232% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 76.2% gross margin and 42.7% Rule of 40 score
- Net cash positive: $176.5M balance sheet buffer
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into EVOP?
The current share price only requires 6.6% 5-year CAGR (16.7% dilution-adjusted), well below historical growth of 16.0%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (14.4% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 16.7% 5-year revenue CAGR to justify $33.99/sh on a true per-share economic cash flow basis.
EVO Payments, Inc. (EVOP) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $651.2M | $651.2M | $755.3M | $876.2M | $1.02B | $1.18B | $1.37B |
| Gross Profit | $496.2M | $496.2M | $575.6M | $667.7M | $774.5M | $898.4M | $1.04B |
| Operating Income (EBIT) | $74.9M | $74.9M | $86.9M | $100.8M | $116.9M | $135.6M | $157.3M |
| Stock-Based Compensation (SBC) | $93.8M | $93.8M | $108.8M | $126.2M | $146.4M | $169.8M | $196.9M |
| Unlevered Free Cash Flow (FCF) | $173.9M | $173.9M | $201.7M | $233.9M | $271.4M | $314.8M | $365.2M |
| SBC-Adjusted True Cash Flow | $80.1M | $80.1M | $92.9M | $107.8M | $125.0M | $145.0M | $168.2M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -30.7 + 0.83 × (Rule of 40) · R² = 84%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 |
|---|---|---|---|---|---|---|---|---|
| EVO Payments, Inc. | EVOP | $3.00B | $651.2M | 76.2% | 26.7% | 42.7% | 14.4% | 4.3× |
| 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 | 4.3× | $2.82B | $3.00B | $33.99 | 0.0% |
| -20% Multiple Compression | 3.5× | $2.26B | $2.43B | $27.59 | -20.0% |
| -35% Multiple Compression | 2.8× | $1.83B | $2.01B | $22.79 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $3.26B | $3.43B | $38.95 | +15.5% |
Frequently Asked Questions: EVO Payments, Inc. (EVOP) Valuation
What is EVO Payments, Inc. (EVOP)'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, EVO Payments, Inc. (EVOP) has a Base Case implied value of $48.77 per share (with a Bear Case of $23.80 and a Bull Case of $81.62), compared to its current price of $33.99. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is EVO Payments, Inc. (EVOP)'s Rule of 40 score and Free Cash Flow margin?
EVO Payments, Inc. achieves a Rule of 40 score of 42.7%, combining a 16.0% revenue growth run-rate with a 26.7% TTM free cash flow margin on $651.2M 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 EVOP stock according to Reverse-DCF analysis?
At $33.99 per share (Enterprise Value of $2.82B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 6.6%, compared to EVO Payments, Inc.'s historical CAGR of 16.0%. Overall market expectations are rated as "Substantial Margin of Safety".
How does EVO Payments, Inc. compare to Software & Cloud Services software peers?
EVO Payments, Inc. (EVOP) 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 EVO Payments, Inc. (EVOP)'s valuation?
EVO Payments, Inc. recorded $93.8M in TTM stock-based compensation (14.4% of revenue). When treating SBC as a cash-equivalent compensation expense, EVO Payments, Inc.'s SBC-adjusted free cash flow yield is 2.7%, scoring 16/25 on our Shareholder Dilution Friction pillar.