NCR Corporation (NCR) DCF Valuation & Fundamental Primer
NCR Corporation (NCR) currently trades at $27.08 with an enterprise value of $4.57B. Our proprietary institutional model rates NCR Corporation at 86/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 7.2% vs. historical growth of 15.2% (Substantial Margin of Safety).
Institutional fundamental teardown of NCR Corporation (NCR) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
NCR Corporation (NCR) 3-Scenario DCF Valuation Range
Stress-test NCR'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: $27.08).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $39.73 +47% | $42.00 +55% | $44.66 +65% | $47.79 +76% | $51.55 +90% |
| 9.3% | $36.03 +33% | $37.82 +40% | $39.88 +47% | $42.26 +56% | $45.06 +66% |
| 10.0% | $32.99 +22% | $34.43 +27% | $36.06 +33% | $37.92 +40% | $40.08 +48% |
| 10.8% | $30.44 +12% | $31.62 +17% | $32.94 +22% | $34.43 +27% | $36.13 +33% |
| 11.5% | $28.29 +4% | $29.26 +8% | $30.35 +12% | $31.56 +17% | $32.92 +22% |
Institutional Software Quality Scorecard (86/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
High-quality software margins with healthy balanced growth and profitability
Zero-debt fortress balance sheet with abundant net cash liquidity
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 185% of EBIT driven by upfront annual collections
- Healthy unit economics: 77.8% gross margin
- Fortress capital structure: Zero debt and $507.6M in pure net cash
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into NCR?
The current share price only requires 7.2% 5-year CAGR (16.7% dilution-adjusted), well below historical growth of 15.2%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (11.7% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 16.7% 5-year revenue CAGR to justify $27.08/sh on a true per-share economic cash flow basis.
NCR Corporation (NCR) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $829.5M | $829.5M | $955.6M | $1.10B | $1.27B | $1.46B | $1.68B |
| Gross Profit | $645.3M | $645.3M | $743.4M | $856.4M | $986.6M | $1.14B | $1.31B |
| Operating Income (EBIT) | $107.8M | $107.8M | $124.2M | $143.1M | $164.9M | $189.9M | $218.8M |
| Stock-Based Compensation (SBC) | $97.0M | $97.0M | $111.8M | $128.8M | $148.4M | $170.9M | $196.9M |
| Unlevered Free Cash Flow (FCF) | $199.1M | $199.1M | $229.3M | $264.2M | $304.3M | $350.6M | $403.9M |
| SBC-Adjusted True Cash Flow | $102.0M | $102.0M | $117.5M | $135.4M | $156.0M | $179.7M | $207.0M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -26.6 + 0.75 × (Rule of 40) · R² = 83%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 |
|---|---|---|---|---|---|---|---|---|
| NCR Corporation | NCR | $3.82B | $829.5M | 77.8% | 24.0% | 39.2% | 11.7% | 4.0× |
| 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 | 4.0× | $3.31B | $3.82B | $27.08 | 0.0% |
| -20% Multiple Compression | 3.2× | $2.65B | $3.15B | $22.38 | -20.0% |
| -35% Multiple Compression | 2.6× | $2.15B | $2.66B | $18.86 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $4.15B | $4.65B | $33.04 | +25.4% |
Frequently Asked Questions: NCR Corporation (NCR) Valuation
What is NCR Corporation (NCR)'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, NCR Corporation (NCR) has a Base Case implied value of $36.06 per share (with a Bear Case of $18.96 and a Bull Case of $58.30), compared to its current price of $27.08. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is NCR Corporation (NCR)'s Rule of 40 score and Free Cash Flow margin?
NCR Corporation achieves a Rule of 40 score of 39.2%, combining a 15.2% revenue growth run-rate with a 24.0% TTM free cash flow margin on $829.5M 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 NCR stock according to Reverse-DCF analysis?
At $27.08 per share (Enterprise Value of $3.31B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 7.2%, compared to NCR Corporation's historical CAGR of 15.2%. Overall market expectations are rated as "Substantial Margin of Safety".
How does NCR Corporation compare to Software & Cloud Services software peers?
NCR Corporation (NCR) earns an institutional Software Quality Score of 86/100 (Grade A — High-Quality 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 NCR Corporation (NCR)'s valuation?
NCR Corporation recorded $97.0M in TTM stock-based compensation (11.7% of revenue). When treating SBC as a cash-equivalent compensation expense, NCR Corporation's SBC-adjusted free cash flow yield is 2.7%, scoring 16/25 on our Shareholder Dilution Friction pillar.