Research HubSoftware & Cloud ServicesNICE Ltd. (NICE)

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SEC 10-K / 10-Q Equity ResearchSoftware & Cloud ServicesTicker: NICE

NICE Ltd. (NICE) DCF Valuation & Fundamental Primer

NICE Ltd. (NICE) currently trades at $113.04 with an enterprise value of $15.74B. Our proprietary institutional model rates NICE Ltd. at 83/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of -6.7% vs. historical growth of 13.5% (Substantial Margin of Safety).

GDA Quality Score

A83/100

High-Quality Compounder

Share Price / DCF Base

$113.04 / $259.09

Enterprise Value

$6.68B

TTM Revenue

$2.74B (+13.5%)

Gross Margin

66.7%

Rule of 40 Score

40.3%

EV / TTM Revenue

2.4×

Structural Moat: Enterprise Software & Cloud Services Switching Costs & Recurring Workflow Integration

Key Growth Catalyst: AI workflow automation, multi-module expansion across enterprise cohorts, and operating margin leverage at NICE Ltd..

Institutional fundamental teardown of NICE Ltd. (NICE) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.

Seed NICE in Interactive 3-Statement Model

Section 1 · Intrinsic Valuation Engine

NICE Ltd. (NICE) 3-Scenario DCF Valuation Range

WACC: 10.0% · Terminal Growth: 2.5% · Diluted Shares: 62.0M

bear Case DCFSensitivity

$129.46

Implied Equity Value:$8.03B

vs Current ($113.04):+14.5%

base Case DCFPrimary Benchmark

$259.09

Implied Equity Value:$16.07B

vs Current ($113.04):+129.2%

bull Case DCFSensitivity

$423.72

Implied Equity Value:$26.29B

vs Current ($113.04):+274.8%

Interactive What-If DCF SandboxSim Rule of 40: 40.3%

Stress-test NICE's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.

Seed Custom Drivers in /model

1-Click Regimes:

5Y Revenue CAGR13.5%

2%Hist: 13.5%50%

Target FCF Margin26.8%

5%Base: 26.8%45%

WACC Discount Rate10.0%

6.5%Base: 10%14.5%

Terminal Growth (g)2.5%

1.0%Implies 13.7× Y5 FCF4.0%

Accounting Lens:

Simulated Implied Price$259.19

Spread vs Market+129.3%

Simulated EV$15.75B

Effective FCF Margin26.8%

Simulated 5-Year Cash Flow Trajectory (Unlevered FCF vs. Discounted PV)Cumulative 5Y PV: $4.03B

Year 1$3.10B

FCF:$832.0M

PV:$756.4M

Year 2$3.52B

FCF:$944.3M

PV:$780.4M

Year 3$4.00B

FCF:$1.07B

PV:$805.3M

Year 4$4.54B

FCF:$1.22B

PV:$830.9M

Year 5$5.15B

FCF:$1.38B

PV:$857.3M

Enterprise Value Composition Bridge$15.75B

Split between 5-Year Explicit Cash Flows and Discounted Terminal Value

5Y Explicit PV: $4.03B (25.6%)Terminal PV: $11.72B (74.4%)

(+) Balance Sheet Cash & Equivalents+$418.1M

(−) Total Debt Obligations−$86.9M

(=) Implied Equity Value (62.0M shs)$16.08B

2D Institutional Valuation Sensitivity Heatmap

Implied share price & upside/downside spread across 25 valuation states (Current Price: $113.04).

WACC \ Terminal	1.5%	2.0%	2.5%	3.0%	3.5%
8.5%	$287.75 +155%	$305.39 +170%	$325.99 +188%	$350.32 +210%	$379.52 +236%
9.3%	$258.99 +129%	$272.89 +141%	$288.85 +156%	$307.37 +172%	$329.11 +191%
10.0%	$235.34 +108%	$246.52 +118%	$259.19 +129%	$273.66 +142%	$290.37 +157%
10.8%	$215.56 +91%	$224.70 +99%	$234.94 +108%	$246.51 +118%	$259.68 +130%
11.5%	$198.77 +76%	$206.35 +83%	$214.77 +90%	$224.18 +98%	$234.77 +108%

Section 2 · Fundamental Underwriting

Institutional Software Quality Scorecard (83/100 · Grade A)

High-Quality Compounder

Strong fundamentals, above-average cash generation, and robust competitive positioning.

Cash Conversion25 / 25

Actual: 134% of EBITTarget: Target: ≥100%

Elite deferred revenue float; FCF exceeds operating income by >20%

Dilution Friction21 / 25

Actual: 6.7% of RevTarget: Target: ≤8%

Disciplined equity compensation well below software industry average

Unit Economics15 / 25

Actual: 67% GM / R40: 40%Target: Target: ≥75% GM / ≥40% R40

Solid gross margins with potential for operating leverage at scale

Balance Sheet22 / 25

Actual: +$331.2M Net CashTarget: Target: Net Cash > 0

Positive net cash cushion; self-funding operations with zero insolvency risk

Core Investment Strengths & Moats

High-grade cash conversion: FCF is 134% of EBIT driven by upfront annual collections
Net cash positive: $331.2M balance sheet buffer

Key Operational & Dilution Risks

Section 3 · Expectations Investing

Reverse-DCF Solver: What Growth is Priced Into NICE?

Substantial Margin of Safety

The current share price only requires -6.7% 5-year CAGR (-2.8% dilution-adjusted), well below historical growth of 13.5%. If the company maintains baseline execution, there is asymmetric upside.

Implied 5-Year Revenue CAGR

-6.7%

Required to justify $6.68B EV

Historical Run-Rate CAGR

13.5%

Audited multi-year top-line trajectory

Growth Hurdle Spread

-20.2%

Implied hurdle minus historical growth

Implied FCF Margin @ Hist. Growth

11.4%

Steady-state FCF margin needed at current CAGR

Institutional Dilution-Adjusted Hurdle Lens

Headline Reverse-DCF ignores Stock-Based Compensation (6.7% of revenue) and annual share dilution (0.8%/yr). Accounting for both requires -2.8% 5-year revenue CAGR to justify $113.04/sh on a true per-share economic cash flow basis.

True Economic Hurdle-2.8%

SBC & Dilution Hurdle Tax+3.9% / yr

Section 4 · 5-Year Forecast Schedule

NICE Ltd. (NICE) 5-Year Fundamental Forecast

Customize in Live Engine

Statement Line Item	TTM Audited Base	TTM	Y1	Y2	Y3	Y4	Y5
Revenue	$2.74B	$2.74B	$3.10B	$3.52B	$4.00B	$4.54B	$5.15B
Gross Profit	$1.83B	$1.83B	$2.07B	$2.35B	$2.67B	$3.03B	$3.44B
Operating Income (EBIT)	$546.0M	$546.0M	$619.7M	$703.3M	$798.3M	$906.0M	$1.03B
Stock-Based Compensation (SBC)	$182.1M	$182.2M	$206.8M	$234.7M	$266.4M	$302.3M	$343.1M
Unlevered Free Cash Flow (FCF)	$732.9M	$732.8M	$831.7M	$944.0M	$1.07B	$1.22B	$1.38B
SBC-Adjusted True Cash Flow	$550.8M	$550.6M	$624.9M	$709.3M	$805.1M	$913.8M	$1.04B

Section 5 · Relative Valuation Multiples & Regression

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Click any peer node or ticker to open its dedicated equity research report

Rule of 40 vs. EV / Revenue Multiple Regression

OLS Fit: EV/Rev = -30.7 + 0.83 × (Rule of 40) · R² = 85%

Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.

NICE Actual vs. Reg. Multiple2.4× vs 2.6× fair

Reg.-Implied Share Price$119.53 (5.8% Discount)

NICENICE Ltd.·Rule of 40: 40.3%·Actual EV/Rev: 2.4×·Regression Fair Multiple: 2.6×

5.8% Below Trendline (Attractive)Open NICE Report

Company	Ticker	Market Cap	TTM Revenue	Gross Margin	FCF Margin	Rule of 40	SBC % Rev	EV / Rev
NICE Ltd.	NICE	$7.01B	$2.74B	66.8%	26.8%	40.3%	6.7%	2.4×
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×

Section 6 · Downside Protection & Multiple Sensitivity

EV / Revenue Multiple Compression Stress Test

Multiple Scenario	EV / Revenue	Implied Enterprise Value	Implied Equity Value	Implied Share Price	Delta vs Current
Current Multiple	2.4×	$6.68B	$7.01B	$113.04	0.0%
-20% Multiple Compression	2.0×	$5.34B	$5.68B	$91.50	-20.0%
-35% Multiple Compression	1.6×	$4.34B	$4.67B	$75.34	-35.0%
Software Baseline Floor (5.0× EV/Rev)	5.0×	$13.68B	$14.01B	$225.80	+104.7%

Section 7 · Investor Diligence FAQ

Frequently Asked Questions: NICE Ltd. (NICE) Valuation

What is NICE Ltd. (NICE)'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, NICE Ltd. (NICE) has a Base Case implied value of $259.09 per share (with a Bear Case of $129.46 and a Bull Case of $423.72), compared to its current price of $113.04. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.

What is NICE Ltd. (NICE)'s Rule of 40 score and Free Cash Flow margin?

NICE Ltd. achieves a Rule of 40 score of 40.3%, combining a 13.5% revenue growth run-rate with a 26.8% TTM free cash flow margin on $2.74B 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 NICE stock according to Reverse-DCF analysis?

At $113.04 per share (Enterprise Value of $6.68B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -6.7%, compared to NICE Ltd.'s historical CAGR of 13.5%. Overall market expectations are rated as "Substantial Margin of Safety".

How does NICE Ltd. compare to Software & Cloud Services software peers?

NICE Ltd. (NICE) earns an institutional Software Quality Score of 83/100 (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 NICE Ltd. (NICE)'s valuation?

NICE Ltd. recorded $182.1M in TTM stock-based compensation (6.7% of revenue). When treating SBC as a cash-equivalent compensation expense, NICE Ltd.'s SBC-adjusted free cash flow yield is 7.8%, scoring 21/25 on our Shareholder Dilution Friction pillar.

NICE Ltd. (NICE) DCF Valuation & Fundamental Primer

WACC \ Terminal

1.5%

2.0%

2.5%

3.0%

3.5%

8.5%

$287.75

+155%

$305.39

+170%

$325.99

+188%

$350.32

+210%

$379.52

+236%

9.3%

$258.99

+129%

$272.89

+141%

$288.85

+156%

$307.37

+172%

$329.11

+191%

10.0%

$235.34

+108%

$246.52

+118%

$259.19

+129%

$273.66

+142%

$290.37

+157%

10.8%

$215.56

+91%

$224.70

+99%

$234.94

+108%

$246.51

+118%

$259.68

+130%

11.5%

$198.77

+76%

$206.35

+83%

$214.77

+90%

$224.18

+98%

$234.77

+108%

Statement Line Item

TTM Audited Base

TTM

Revenue

$2.74B

$3.10B

$3.52B

$4.00B

$4.54B

$5.15B

Gross Profit

$1.83B

$2.07B

$2.35B

$2.67B

$3.03B

$3.44B

Operating Income (EBIT)

$546.0M

$619.7M

$703.3M

$798.3M

$906.0M

$1.03B

Stock-Based Compensation (SBC)

$182.1M

$182.2M

$206.8M

$234.7M

$266.4M

$302.3M

$343.1M

Unlevered Free Cash Flow (FCF)

$732.9M

$732.8M

$831.7M

$944.0M

$1.07B

$1.22B

$1.38B

SBC-Adjusted True Cash Flow

$550.8M

$550.6M

$624.9M

$709.3M

$805.1M

$913.8M

$1.04B

Company

Ticker

Market Cap

TTM Revenue

Gross Margin

FCF Margin

Rule of 40

SBC % Rev

EV / Rev

NICE Ltd.

NICE

$7.01B

$2.74B

66.8%

26.8%

40.3%

6.7%

2.4×

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×

Multiple Scenario

EV / Revenue

Implied Enterprise Value

Implied Equity Value

Implied Share Price

Delta vs Current

Current Multiple

2.4×

$6.68B

$7.01B

$113.04

0.0%

-20% Multiple Compression

2.0×

$5.34B

$5.68B

$91.50

-20.0%

-35% Multiple Compression

1.6×

$4.34B

$4.67B

$75.34

-35.0%

Software Baseline Floor (5.0× EV/Rev)

5.0×

$13.68B

$14.01B

$225.80

+104.7%

NICE Ltd. (NICE) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (83/100 · Grade A)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into NICE?

NICE Ltd. (NICE) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: NICE Ltd. (NICE) Valuation

What is NICE Ltd. (NICE)'s intrinsic DCF valuation and implied share price?

What is NICE Ltd. (NICE)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into NICE stock according to Reverse-DCF analysis?

How does NICE Ltd. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact NICE Ltd. (NICE)'s valuation?

Related Software & Cloud Services Equity Research Reports

NICE Ltd. (NICE) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (83/100 · Grade A)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into NICE?

NICE Ltd. (NICE) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: NICE Ltd. (NICE) Valuation

What is NICE Ltd. (NICE)'s intrinsic DCF valuation and implied share price?

What is NICE Ltd. (NICE)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into NICE stock according to Reverse-DCF analysis?

How does NICE Ltd. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact NICE Ltd. (NICE)'s valuation?

Related Software & Cloud Services Equity Research Reports