Donnelley Financial Solutions (DFIN) AI Stock Analysis

• Market Cap: $1.44B
• Dividend Yield: N/A
• Average Volume (3M): 279.72K
• Price to Earnings (P/E): 51.8
• Beta (1Y): 1.20
• Revenue Growth: -6.40%
• EPS Growth: -66.39%
• Country: US
• Employees: 1,800
• Sector: Technology
• Sector Strength: 88
• Industry: Financial - Capital Markets
• EPS (TTM): 0.86
• Shares Outstanding: 26,537,083
• 10 Day Avg. Volume: 291,627
• 30 Day Avg. Volume: 279,723
• 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: 1.06
• Enterprise Value/Revenue: 2.03
• Enterprise Value/Gross Profit: 3.34
• Enterprise Value/Ebitda: 12.66
• 1Y Price Target: $61.50
• Price Target Upside: 13.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $58.00 ▲(6.68% Upside)

Donnelley Financial Solutions' overall stock score reflects a mix of strengths and challenges. The most significant factor is the company's strategic shift towards software solutions, which shows promising growth and improved profitability. However, declining revenue in traditional segments and bearish technical indicators weigh on the score. The valuation is moderate, and while the earnings call provided positive insights into software growth, challenges in other areas persist. The absence of a dividend yield also limits appeal for some investors.

Positive Factors

SaaS Mix Shift

DFIN's strategic shift toward software and a stated goal of 60% software mix by 2028 indicates a durable move to recurring, subscription revenue. A higher SaaS mix improves revenue predictability, customer stickiness, and supports margin expansion as transactional volatility declines.

Margin Improvement

Significant adjusted EBITDA growth and a 410bp margin expansion signal operating leverage from higher-margin software and disciplined cost management. If sustained, improved margins enhance cash generation and reinvestment capacity, supporting long-term profitability beyond cyclical revenue swings.

Product Innovation

Recent product launches expand DFIN's cloud compliance and collaboration offerings, strengthening competitive differentiation and increasing customer switching costs. Continuous product development supports cross-sell, retention, and long-term recurring revenue growth in regulated sectors.

Negative Factors

Declining Revenue Trend

A sustained decline in overall revenue reduces scale benefits and pressures gross margins and returns. Continued dependency on offsetting software growth to replace legacy declines creates execution risk; failure to regain topline growth would impair reinvestment and earnings durability.

Negative Free Cash Flow Growth

Negative free cash flow growth, despite strong operating cash conversion versus net income, constrains capital allocation. Persistently weak FCF growth limits ability to fund R&D, M&A, debt reduction, or shareholder returns and heightens reliance on external financing for strategic initiatives.

Pension Settlement Charge

The large pension settlement charge reflects legacy defined-benefit obligations and materially reduced reported earnings. While partly non-cash, such legacy liabilities can strain balance sheet flexibility, complicate capital allocation, and highlight past underfunding risks that affect long-term financial stability.

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 primarily through a combination of software-as-a-service (SaaS) subscriptions and service fees associated with its compliance and regulatory offerings. Key revenue streams include fees from clients for access to its cloud-based software solutions, as well as fees for professional services related to regulatory filing and compliance consulting. The company also benefits from strategic partnerships with financial institutions and regulatory bodies, enhancing its service offerings and broadening its client base. Additionally, DFIN's focus on sectors with stringent regulatory requirements, such as finance and healthcare, positions it to capture ongoing demand for compliance services, thereby contributing to its earnings.

Donnelley Financial Solutions Financial Statement Overview

Summary

Donnelley Financial Solutions faces challenges with declining revenue and profitability margins, impacting its income statement. The balance sheet shows improved leverage but reduced return on equity. Cash flow metrics reveal efficient cash generation but highlight concerns with declining free cash flow growth. Overall, the company needs to address revenue and profitability pressures while maintaining its improved leverage position.

Income Statement

Donnelley Financial Solutions has shown a declining revenue trend with a significant drop in the TTM period. The gross profit margin has decreased substantially from previous years, indicating pressure on cost management. However, the company maintains a positive net profit margin, albeit lower than previous years, suggesting some profitability despite revenue challenges.

Balance Sheet

The company has improved its debt-to-equity ratio over the years, indicating better leverage management. The return on equity has decreased in the TTM period, reflecting reduced profitability. The equity ratio remains stable, suggesting a balanced capital structure.

Cash Flow

Free cash flow growth has been negative in recent periods, highlighting potential liquidity concerns. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to earnings. However, the decline in free cash flow growth is a risk factor.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	750.80M	781.90M	797.20M	833.60M	993.30M	894.50M
Gross Profit	455.60M	484.00M	463.90M	463.40M	580.20M	398.50M
EBITDA	120.30M	209.70M	192.00M	212.00M	275.20M	82.20M
Net Income	32.50M	92.40M	82.20M	102.50M	145.90M	-25.90M
Balance Sheet
Total Assets	816.30M	857.00M	806.90M	828.30M	883.30M	898.70M
Cash, Cash Equivalents and Short-Term Investments	22.70M	57.30M	23.10M	34.20M	54.50M	73.60M
Total Debt	162.70M	144.40M	153.10M	215.90M	187.20M	301.30M
Total Liabilities	393.20M	420.90M	404.70M	498.80M	506.30M	650.90M
Stockholders Equity	423.10M	436.10M	402.20M	329.50M	377.00M	247.80M
Cash Flow
Free Cash Flow	101.20M	105.20M	62.20M	96.00M	137.70M	123.10M
Operating Cash Flow	161.50M	171.10M	124.00M	150.20M	180.00M	154.20M
Investing Cash Flow	-60.20M	-53.30M	-51.30M	-50.90M	-45.00M	-19.80M
Financing Cash Flow	-111.90M	-82.10M	-84.60M	-121.10M	-154.90M	-77.50M

Donnelley Financial Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 54.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DFIN, the sentiment is Positive. The current price of 54.37 is above the 20-day moving average (MA) of 51.15, above the 50-day MA of 48.33, and above the 200-day MA of 52.65, indicating a bullish trend. The MACD of 2.01 indicates Negative momentum. The RSI at 65.65 is Neutral, neither overbought nor oversold. The STOCH value of 68.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DFIN.

Donnelley Financial Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPY	73 Outperform	$800.32M	10.33	9.64%	0.99%	12.52%	16.53%
MRX	73 Outperform	$2.81B	13.25	―	1.47%	―	―
SIEB	72 Outperform	$113.20M	15.38	8.43%	―	8.47%	-32.22%
TIGR	68 Neutral	$1.58B	10.66	22.84%	―	65.74%	345.40%
DFIN	64 Neutral	$1.44B	51.83	7.49%	―	-6.40%	-66.39%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PWP	53 Neutral	$2.00B	33.83	―	1.62%	-12.44%	―