Deluxe (DLX) AI Stock Analysis

• Market Cap: $703.78M
• Dividend Yield: 7.38%
• Average Volume (3M): 478.50K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 1.41
• Revenue Growth: -3.22%
• EPS Growth: 99.58%
• Country: US
• Employees: 5,170
• Sector: Communication Services
• Sector Strength: 79
• Industry: Traditional Media
• EPS (TTM): 1.18
• Shares Outstanding: 44,430,800
• 10 Day Avg. Volume: 466,324
• 30 Day Avg. Volume: 478,495
• PEG Ratio: 0.14
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.34
• Price to Cash Flow (P/CF): 3.00
• P/FCF Ratio: 2.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $32.50
• Price Target Upside: 105.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Deluxe's stock score reflects solid financial performance with strong cash flow, but revenue declines and high leverage are significant risks. Technical indicators suggest bearish momentum, while recent board changes and strategic initiatives provide a positive outlook. The stock is reasonably valued with an attractive dividend yield, making it a cautious investment.

Positive Factors

Financial Performance

Deluxe exceeded profitability expectations despite revenue challenges, driven by efficiencies that boosted EBITDA and free cash flow.

Strategic Initiatives

The full rollout of North Star in 2025 will enhance margins and cash flow, aiding strategic reinvestment into the business and debt reduction.

Negative Factors

Revenue Concerns

Revenue and EBITDA softness overshadowed the beat in 4Q FCF.

Deluxe Business Overview & Revenue Model

Company Description

Deluxe Corp. engages in the provision of marketing products and services. It operates through the following segments: Small Business Services, Financial Services, and Direct Checks. The Small Business Services segment offers printed forms to small businesses, including deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices and personnel forms, as well as computer forms compatible with accounting software packages. The Financial Services segment comprises of direct sales force that offers product and service supply contracts with financial institution clients, including banks, credit unions, and financial services companies. The Direct Checks segment offers products and services to consumers using direct marketing, such as print advertising and search engine marketing, and optimization strategies. The company as founded by W. R. Hotchkiss in 1915 and is headquartered in Shoreview, MN.

How the Company Makes Money

Deluxe Corporation generates revenue through multiple streams, primarily focusing on its key segments which include payments, cloud solutions, promotional solutions, and checks. The company earns money by providing payment processing services, which include merchant services and treasury management solutions, to various businesses. Its cloud solutions offer web hosting, web development, and digital marketing services that cater to the growing demand for online business presence. The promotional solutions segment involves selling promotional products, custom apparel, and print marketing materials. Additionally, Deluxe continues to garner significant revenue from its traditional check printing business, serving both individual consumers and financial institutions. Significant partnerships with banks and businesses further bolster its earnings by expanding its customer base and enhancing service offerings.

Deluxe Financial Statement Overview

Summary

Deluxe exhibits strong profitability and cash flow generation, with notable improvements in net profit margins and efficient cash flow management. However, declining revenue and high leverage raise concerns about future financial stability.

Income Statement

Deluxe has shown consistent gross profit margins with a slight decline in total revenue over the years. The net profit margin has improved recently, indicating better control over expenses and increased profitability. The EBIT margin has remained stable while EBITDA margin has decreased, reflecting lower depreciation and amortization benefits. Overall, Deluxe demonstrates good profitability, though revenue growth is a concern.

Balance Sheet

The company's debt-to-equity ratio is high, reflecting significant leverage, which may pose risks in a volatile market. However, the return on equity has improved, signaling efficient use of equity capital. The equity ratio suggests a moderate level of equity financing, and while the company has maintained a stable asset base, the high debt levels are a concern.

Cash Flow

Deluxe has generated strong operating cash flows, with consistent free cash flow figures. The operating cash flow to net income ratio is robust, indicating efficient cash flow generation relative to net income. The free cash flow growth rate is positive, which supports future investments and debt servicing. The cash flow performance is a strong point for the company.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.12B	2.19B	2.24B	2.02B	1.79B
	Gross Profit
1.13B	1.16B	1.21B	1.14B	1.06B
	EBIT
192.18M	160.79M	169.40M	204.10M	227.60M
	EBITDA
365.32M	338.37M	386.45M	368.57M	159.77M
	Net Income Common Stockholders
52.80M	26.12M	65.39M	62.63M	8.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
34.40M	71.96M	40.40M	41.20M	123.10M
	Total Assets
2.83B	3.08B	3.08B	3.07B	1.87B
	Total Debt
1.55B	1.67B	1.69B	1.74B	868.40M
	Net Debt
1.52B	1.59B	1.65B	1.70B	745.30M
	Total Liabilities
2.21B	2.48B	2.47B	2.50B	1.33B
	Stockholders Equity
620.92M	604.09M	604.20M	574.60M	540.80M
Cash Flow		Free Cash Flow
99.89M	97.62M	86.90M	101.70M	155.00M
	Operating Cash Flow
194.28M	198.37M	191.50M	210.80M	217.60M
	Investing Cash Flow
-69.84M	-43.30M	-80.30M	-1.07B	-56.10M
	Financing Cash Flow
-267.25M	-37.68M	-48.60M	913.00M	-110.60M

Deluxe Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.84
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLX, the sentiment is Negative. The current price of 15.84 is below the 20-day moving average (MA) of 16.73, below the 50-day MA of 19.71, and below the 200-day MA of 20.39, indicating a bearish trend. The MACD of -1.17 indicates Negative momentum. The RSI at 28.68 is Positive, neither overbought nor oversold. The STOCH value of 47.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DLX.

Deluxe Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLX	66 Neutral	$703.78M	13.78	8.61%	7.38%	-3.22%	99.58%
HPQ	61 Neutral	$26.98B	10.77	84.33%	3.72%	1.03%	-18.56%
Sector *	59 Neutral	$29.20B	0.14	-13.78%	4.02%	2.18%	-51.50%
CMPR	54 Neutral	$1.10B	7.02	-27.42%	―	4.60%	303.80%
ACCO	48 Neutral	$443.97M	―	-14.59%	6.28%	-9.09%	-356.14%
QUAD	46 Neutral	$290.01M	―	-60.09%	4.06%	-9.65%	6.43%
XRX	43 Neutral	$765.47M	―	-65.36%	15.97%	-9.70%	-5576.16%

Deluxe Corporate Events

Deluxe Appoints Morgan Schuessler to Board of Directors

On February 20, 2025, Deluxe Corporation’s Board of Directors elected Morgan M. Schuessler, Jr., a seasoned leader in the payments and financial technology sector, to its board, effective February 21, 2025. Schuessler, who currently serves as CEO and President of Evertec Group, brings over three decades of industry experience, which is expected to enhance Deluxe’s strategic focus on accelerating growth in its payments business. His appointment, along with additional committee roles for him and Hugh S. Cummins, highlights Deluxe’s commitment to strengthening its board with experienced leaders to support its vision and growth strategy.

Deluxe Announces Board Changes and New Director

On January 22, 2025, Deluxe Corporation announced the election of Hugh S. Cummins III to its Board of Directors, effective February 21, 2025. Cummins, with extensive experience in the banking and payments industry, most recently served as Vice Chair and Chief Operating Officer at Truist Financial Corporation. His appointment is expected to bolster Deluxe’s strategic evolution as a leading payments and data company. Additionally, William C. Cobb and Martyn R. Redgrave have chosen not to stand for re-election at the company’s 2025 Annual Meeting of Shareholders.