Deluxe (DLX) AI Stock Analysis

• Market Cap: $720.31M
• Dividend Yield: 7.38%
• Average Volume (3M): 344.48K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 1.15
• Revenue Growth: -2.69%
• EPS Growth: 61.73%
• Country: US
• Employees: 4,981
• Sector: Industrials
• Sector Strength: 86
• Industry: Advertising Agencies
• EPS (TTM): 0.75
• Shares Outstanding: 44,739,840
• 10 Day Avg. Volume: 302,601
• 30 Day Avg. Volume: 344,482
• PEG Ratio: 0.31
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.95
• Enterprise Value/Market Cap: 3.02
• Enterprise Value/Revenue: 0.26
• Enterprise Value/Gross Profit: 1.94
• Enterprise Value/Ebitda: 1.46
• 1Y Price Target: $23.00
• Price Target Upside: 42.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: $18.00 ▲(11.80%Upside)

Deluxe's overall stock score reflects robust cash flow management and strategic growth in key segments like Data. However, high leverage and challenges in the Print segment, coupled with economic uncertainties, present potential risks. The valuation is appealing due to a high dividend yield, adding a positive aspect for income-focused investors.

Positive Factors

Financial Performance

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

Future Prospects

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

Strategic Growth

The company's 2025 guidance reflects management's strategy to grow its high-margin, technology-driven business lines while maintaining strong financial discipline and steady cash generation.

Negative Factors

Financial Outlook

Moderating FY25 estimates to reflect a measured financial outlook.

Revenue and Earnings

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

Deluxe Business Overview & Revenue Model

Company Description

Deluxe Corporation (DLX) is a diversified business services company that operates primarily in the United States. It provides a wide range of solutions to small businesses, financial institutions, and enterprise clients. The company's core offerings include checks, forms, marketing services, web development and hosting services, and data-driven marketing solutions. Deluxe aims to support businesses in enhancing their operations and customer engagement through its comprehensive suite of products and services.

How the Company Makes Money

Deluxe Corporation generates revenue through several key streams. A significant portion of its income comes from the sale of printed products like checks and forms, which are used by financial institutions and small businesses. Additionally, Deluxe makes money through its marketing services, which include web development, hosting, and data-driven marketing solutions designed to help businesses grow their online presence and customer base. The company also leverages strategic partnerships with financial institutions to expand its reach and product offerings, contributing to its revenue. Deluxe's ability to provide a broad array of services to a diverse client base is a critical factor in its earning potential.

Deluxe Financial Statement Overview

Summary

Deluxe exhibits strong cash flow management and healthy gross profit margins. However, it faces challenges with high leverage and lower net profitability, which could pose risks if not managed carefully.

Income Statement

Deluxe has shown a stable revenue stream with a recent decrease in revenue growth. The Gross Profit Margin stands at 52.9% TTM, indicating healthy product margins. However, the Net Profit Margin is at 3.1% TTM, reflecting lower profitability. EBIT and EBITDA margins are moderate at 9.0% and 13.7% TTM, respectively, showing operational efficiency but also room for improvement.

Balance Sheet

The Debt-to-Equity Ratio is elevated at 0.58, suggesting significant leverage. However, the Return on Equity (ROE) is a moderate 2.5% TTM, indicating limited returns on shareholder investment. The Equity Ratio at 100% TTM suggests strong equity support, yet the overall leverage risk remains a concern.

Cash Flow

Deluxe has demonstrated strong cash flow management with a Free Cash Flow growth of 44.2% TTM, reflecting robust liquidity. The Operating Cash Flow to Net Income Ratio is 3.3, indicating effective conversion of income into cash. The Free Cash Flow to Net Income Ratio is 2.2, showcasing efficient cash utilization relative to profits.

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
EBITDA	365.32M	338.37M	386.45M	368.57M	159.77M
Net Income	52.80M	26.12M	65.39M	62.63M	8.80M
Balance Sheet
Total Assets	2.83B	3.08B	3.08B	3.07B	1.87B
Cash, Cash Equivalents and Short-Term Investments	34.40M	71.96M	40.40M	41.20M	123.10M
Total Debt	1.56B	1.67B	1.69B	1.74B	868.40M
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: 16.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 16.1 is below the 20-day moving average (MA) of 16.58, above the 50-day MA of 15.60, and below the 200-day MA of 17.85, indicating a neutral trend. The MACD of 0.26 indicates Positive momentum. The RSI at 49.70 is Neutral, neither overbought nor oversold. The STOCH value of 40.90 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	71 Outperform	$720.31M	12.92	9.10%	7.38%	-2.69%	61.73%
STGW	66 Neutral	$1.53B	516.22	-0.32%	―	9.56%	―
QNST	65 Neutral	$934.58M	―	-0.29%	―	88.81%	99.16%
Sector *	60 Neutral	AU$1.67B	11.14	11.24%	3.51%	7.29%	7.00%
TSQ	54 Neutral	$112.66M	―	74.55%	11.61%	-0.16%	57.03%
NCMI	48 Neutral	$453.60M	―	-4.73%	1.25%	42.01%	-100.56%
CCO	48 Neutral	$526.52M	―	4.92%	―	-17.54%	66.05%

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.