Donnelley Financial Solutions (DFIN) AI Stock Analysis

• Market Cap: $1.41B
• Dividend Yield: N/A
• Average Volume (3M): 251.52K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 1.14
• Revenue Growth: -5.93%
• EPS Growth: -19.77%
• Country: US
• Employees: 1,800
• Sector: Technology
• Sector Strength: 88
• Industry: Financial - Capital Markets
• EPS (TTM): 1.49
• Shares Outstanding: 27,494,778
• 10 Day Avg. Volume: 325,654
• 30 Day Avg. Volume: 251,517
• PEG Ratio: 1.59
• Price to Book (P/B): 4.20
• Price to Sales (P/S): 2.34
• P/FCF Ratio: 17.41
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 2.53
• Enterprise Value/Gross Profit: 4.35
• Enterprise Value/Ebitda: 9.71
• 1Y Price Target: $73.00
• Price Target Upside: 41.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 64 Neutral
• Price Target: $60.00 ▲(16.69% Upside)

Donnelley Financial Solutions' overall score reflects strong financial performance and profitability, tempered by technical indicators suggesting a lack of momentum and mixed earnings call sentiment. The company's strategic shift towards software solutions is promising, but challenges in other revenue areas persist.

Positive Factors

Software Solutions Growth

The growth in software solutions, particularly recurring compliance software, indicates a strategic shift towards higher-margin, scalable offerings, enhancing long-term revenue stability.

Strong Cash Flow

The increase in free cash flow, driven by favorable working capital and lower capital expenditures, provides financial flexibility for future investments and debt servicing.

Adjusted EBITDA Margin

A strong EBITDA margin reflects operational efficiency and effective cost management, supporting sustained profitability and competitive positioning.

Negative Factors

Decline in Total Net Sales

The decline in net sales, driven by lower volumes in key segments, may challenge revenue growth and necessitate strategic adjustments to offset losses.

Reduction in Print Sales

The significant drop in print sales, influenced by regulatory changes, highlights the need for diversification and adaptation to digital solutions.

Weak Capital Markets Revenue

The decline in capital markets revenue, reaching a historical low, underscores potential vulnerabilities in market-dependent segments, impacting overall financial performance.

Donnelley Financial Solutions Business Overview & Revenue Model

Company Description

Donnelley Financial Solutions, Inc. operates as a risk and compliance solutions company worldwide. The company operates through four segments: Capital Markets – Software Solutions (CM-SS), Capital Markets – Compliance and Communications Management (CM-CCM), Investment Companies – Software Solutions (IC-SS), and Investment Companies – Compliance and Communications Management (IC-CCM). The CM-SS segment provides Venue, ActiveDisclosure, eBrevia, and other solutions to public and private companies to manage public and private transaction processes, extract data, and analyze contracts; collaborate; and tag, validate, and file SEC documents. The CM-CCM segment offers tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions and services that enable storage and management of compliance and regulatory information in a self-service and central repository for accessing, assembling, editing, translating, rendering, and submitting documents to regulators. The IC-CCM segment offers clients with tech-enabled solutions for creating and filing regulatory communications and solutions for investor communications, as well as XBRL-formatted filings pursuant to the Investment Act, through the SEC EDGAR system. This segment also provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, shareholder meeting review, and expert support. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.

How the Company Makes Money

DFIN generates revenue through a diversified model that includes several key streams. Primarily, the company earns money by providing regulatory filing services, where clients pay for assistance in preparing and submitting documents to regulatory bodies like the SEC. Another significant revenue source comes from its SaaS offerings, which include advanced technology platforms that help clients manage their financial data and reporting needs more efficiently. DFIN also generates income from its advisory services, where it provides strategic consulting related to compliance, risk management, and governance. Additionally, partnerships with financial institutions and technology providers enhance its offerings and contribute to revenue growth by expanding its client base and service capabilities.

Donnelley Financial Solutions Financial Statement Overview

Summary

Donnelley Financial Solutions demonstrates strong profitability and cash flow metrics, with a healthy balance sheet and moderate leverage. Despite a revenue decline, the company's ability to sustain profitability and generate cash flow positions it well for future opportunities.

Income Statement

Donnelley Financial Solutions shows a mixed performance in its income statement. The company has experienced a decline in revenue over the TTM period, with a revenue growth rate of -3.16%. However, the company maintains a healthy gross profit margin of 41.77% and a net profit margin of 10.87%. The EBIT and EBITDA margins are also solid at 9.87% and 25.77%, respectively, indicating operational efficiency. Despite the revenue decline, profitability metrics remain strong, suggesting effective cost management.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.47, indicating moderate leverage. The return on equity (ROE) stands at 18.95%, showcasing effective use of equity to generate profits. The equity ratio is not explicitly calculated, but the company's equity position appears robust relative to its total assets. Overall, the balance sheet suggests a well-capitalized company with a balanced approach to debt and equity financing.

Cash Flow

Cash flow analysis reveals positive trends, with a free cash flow growth rate of 15.78% in the TTM period. The operating cash flow to net income ratio is 0.84, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 0.63 further supports the company's ability to convert earnings into cash. These metrics highlight a solid cash flow position, providing flexibility for future investments and debt servicing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	755.00M	781.90M	797.20M	833.60M	993.30M	894.50M
Gross Profit	439.20M	484.00M	463.90M	463.40M	580.20M	398.50M
EBITDA	196.60M	209.70M	192.00M	212.00M	290.50M	82.20M
Net Income	82.10M	92.40M	82.20M	102.50M	145.90M	-25.90M
Balance Sheet
Total Assets	874.70M	841.60M	806.90M	828.30M	883.30M	865.60M
Cash, Cash Equivalents and Short-Term Investments	33.80M	57.30M	23.10M	34.20M	54.50M	73.60M
Total Debt	203.90M	141.40M	150.60M	213.90M	181.30M	301.30M
Total Liabilities	442.60M	405.50M	404.70M	498.80M	506.30M	617.80M
Stockholders Equity	432.10M	436.10M	402.20M	329.50M	377.00M	247.80M
Cash Flow
Free Cash Flow	109.30M	105.20M	62.20M	96.00M	137.70M	123.10M
Operating Cash Flow	173.50M	171.10M	124.00M	150.20M	180.00M	154.20M
Investing Cash Flow	-64.10M	-53.30M	-51.30M	-50.90M	-45.00M	-19.80M
Financing Cash Flow	-111.10M	-82.10M	-84.60M	-121.10M	-154.90M	-77.50M

Donnelley Financial Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 51.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DFIN, the sentiment is Negative. The current price of 51.42 is below the 20-day moving average (MA) of 53.76, below the 50-day MA of 55.60, and below the 200-day MA of 55.23, indicating a bearish trend. The MACD of -1.39 indicates Positive momentum. The RSI at 37.51 is Neutral, neither overbought nor oversold. The STOCH value of 29.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DFIN.

Donnelley Financial Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MC	80 Outperform	$5.84B	28.53	38.39%	3.52%	42.85%	1398.33%
SF	77 Outperform	$11.72B	22.17	12.86%	1.57%	8.76%	10.32%
XP	67 Neutral	$9.90B	11.66	22.10%	3.46%	-6.77%	2.95%
LPLA	65 Neutral	$27.24B	23.29	22.03%	0.35%	29.23%	13.45%
DFIN	64 Neutral	$1.41B	18.16	18.80%	―	-5.93%	-19.77%
PJT	64 Neutral	$6.36B	31.40	95.78%	0.55%	18.40%	54.77%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%