Donnelley Financial Solutions (DFIN) AI Stock Analysis

• Market Cap: $1.26B
• Dividend Yield: N/A
• Average Volume (3M): 279.72K
• Price to Earnings (P/E): 45.9
• Beta (1Y): 1.30
• Revenue Growth: -6.40%
• EPS Growth: -66.39%
• Country: US
• Employees: 1,800
• Sector: Technology
• Sector Strength: 88
• Industry: Financial - Capital Markets
• EPS (TTM): 0.70
• Shares Outstanding: 25,619,984
• 10 Day Avg. Volume: 291,627
• 30 Day Avg. Volume: 279,723
• PEG Ratio: -0.63
• Price to Book (P/B): 3.39
• Price to Sales (P/S): 1.67
• P/FCF Ratio: 11.91
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 1.90
• Enterprise Value/Gross Profit: 3.41
• Enterprise Value/Ebitda: 6.77
• 1Y Price Target: $61.50
• Price Target Upside: 30.93% 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: $53.00 ▲(12.84% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by solid financial stability (strong free cash flow and improved leverage) and a constructive earnings-call outlook emphasizing sustained >30% margin profile and growing recurring software mix. These positives are tempered by weakening bottom-line trends in the financial statements, only neutral-to-mixed technical momentum, and a high P/E valuation that leaves less room for execution missteps (especially given transactional and capital-markets cyclicality).

Positive Factors

Strong free cash flow

Consistent operating cash generation (FCF ~$108M in 2025 and steady OCF historically) provides durable financial flexibility. It supports capex for product development, disciplined buybacks, and cushions against cyclical revenue swings, strengthening long-term execution optionality.

Improved leverage / healthier balance sheet

Material reduction in leverage and non-GAAP net leverage ~0.6x reduces refinancing and solvency risk. Stronger capital structure enables ongoing buybacks and selective investment while preserving liquidity, a durable support for strategic initiatives over the next several quarters.

Recurring software mix & margin targets

A structural shift toward recurring SaaS (target ~80% of revenue) plus a long-term margin goal >30% reflects a higher-quality, more predictable revenue base. Combined with product launches and AI embedding, this supports sustainable margin expansion and revenue durability.

Negative Factors

Multi-year revenue decline

A multi-year downtrend in revenue erodes scale benefits and limits operating leverage over time. Even with margin discipline, sustained top-line softness pressures net income and ROE, requiring consistent SaaS growth to reverse structural declines over the next several quarters.

Declining transactional revenue / capital markets exposure

Persistent declines in transaction-driven sales and sensitivity to capital-markets activity create lumpy, cyclical revenue. This structural exposure reduces predictability and can mute growth even as recurring SaaS expands, complicating medium-term planning and margin delivery.

Regulatory timing and product ramp delays

Dependence on regulatory catalysts and multiyear product ramps (ArcFlex not meaningful until 2027) makes near-term revenue growth lumpy. Execution and timing risk around regulatory-driven adoption constrain predictable expansion of higher-margin SaaS in the near term.

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

Cash flow is a key strength (consistently strong operating cash flow and improved 2025 free cash flow) and leverage has improved materially (debt-to-equity down to ~0.47x). Offsetting this, revenue has trended down over 2021–2025 and net profitability/ROE weakened notably in 2025, indicating softer earnings momentum despite solid operating margins.

Income Statement

Revenue has trended down from 2021 to 2025 (despite a small rebound in 2025), and profitability has clearly compressed: net margin fell from ~14.7% (2021) to ~4.2% (2025) with net income dropping sharply in 2025. Offsetting this, the core operating profile remains solid with healthy gross margin (~55–62% historically) and mid-to-high teens operating margin in recent years (EBIT margin ~19.5% in 2025), showing the business still generates meaningful operating earnings even as bottom-line results weakened.

Balance Sheet

Leverage looks manageable overall, with debt-to-equity improving materially versus 2020 (from ~1.22x to ~0.47x in 2025), indicating a healthier capital structure than earlier in the period. However, equity has declined from 2024 to 2025 and returns on equity have come down meaningfully (from ~21% in 2024 to ~8.5% in 2025), reflecting weaker profitability and reducing balance-sheet quality momentum.

Cash Flow

Cash generation is a clear strength: operating cash flow remained strong and consistent (~$165–180M in 2021–2025), while free cash flow improved in 2025 to ~$108M with positive growth versus 2024. A key watch-out is that cash flow did not fully track earnings strength in the last two years (both operating cash flow and free cash flow are well below net income in coverage terms as provided), but overall free cash flow remains robust and supportive of financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	767.00M	781.90M	797.20M	833.60M	993.30M
Gross Profit	427.30M	484.00M	463.90M	463.40M	580.20M
EBITDA	215.50M	209.70M	192.00M	212.00M	275.20M
Net Income	32.40M	92.40M	82.20M	102.50M	145.90M
Balance Sheet
Total Assets	800.40M	857.00M	806.90M	828.30M	883.30M
Cash, Cash Equivalents and Short-Term Investments	24.50M	57.30M	23.10M	34.20M	54.50M
Total Debt	181.80M	144.40M	153.10M	215.90M	187.20M
Total Liabilities	421.20M	420.90M	404.70M	498.80M	506.30M
Stockholders Equity	379.20M	436.10M	402.20M	329.50M	377.00M
Cash Flow
Free Cash Flow	107.80M	105.20M	62.20M	96.00M	137.70M
Operating Cash Flow	164.90M	171.10M	124.00M	150.20M	180.00M
Investing Cash Flow	-57.00M	-53.30M	-51.30M	-50.90M	-45.00M
Financing Cash Flow	-141.80M	-82.10M	-84.60M	-121.10M	-154.90M

Donnelley Financial Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 46.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 46.97 is below the 20-day moving average (MA) of 47.51, below the 50-day MA of 48.47, and below the 200-day MA of 52.87, indicating a bearish trend. The MACD of -1.12 indicates Negative momentum. The RSI at 48.61 is Neutral, neither overbought nor oversold. The STOCH value of 75.63 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
MRX	73 Outperform	$2.88B	13.51	―	1.47%	―	―
OPY	72 Outperform	$900.16M	6.63	9.64%	0.99%	12.52%	16.53%
SIEB	72 Outperform	$81.66M	11.10	8.43%	―	8.47%	-32.22%
TIGR	68 Neutral	$1.39B	9.37	22.84%	―	65.74%	345.40%
DFIN	64 Neutral	$1.26B	45.89	7.49%	―	-6.40%	-66.39%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PWP	53 Neutral	$1.74B	35.02	―	1.62%	-12.44%	―