Deluxe (DLX) AI Stock Analysis

• Market Cap: $672.89M
• Dividend Yield: 7.98%
• Average Volume (3M): 354.05K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 1.12
• Revenue Growth: -2.69%
• EPS Growth: 61.73%
• Country: US
• Employees: 4,981
• Sector: Communication Services
• Sector Strength: 82
• Industry: Advertising Agencies
• EPS (TTM): 0.75
• Shares Outstanding: 44,739,840
• 10 Day Avg. Volume: 393,449
• 30 Day Avg. Volume: 354,052
• PEG Ratio: 4.13
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.41
• Enterprise Value/Market Cap: 3.54
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 2.12
• Enterprise Value/Ebitda: 1.60
• 1Y Price Target: $23.00
• Price Target Upside: 55.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 72 Outperform
• Price Target: $16.50 ▲(11.49%Upside)

Deluxe's strong cash flow and undervaluation are major strengths, though high leverage and soft print demand pose risks. Positive earnings call sentiment and strategic growth offset some operational challenges.

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 provides technology-enabled solutions to enterprises, small businesses, and financial institutions in the United States, Canada, Australia, South America, and Europe. It operates through four segments: Payments, Cloud Solutions, Promotional Solutions, and Checks. The company provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing, and paperless treasury management solutions, as well as payment exchange, and fraud and security services; web hosting and design services, data-driven marketing solutions and hosted solutions, such as digital engagement, logo design, financial institution profitability reporting, and business incorporation services. It also offers business forms, accessories, advertising specialties, promotional apparel, and retail packaging services; and printed personal and business checks. The company was formerly known as Deluxe Check Printers, Incorporated and changed its name to Deluxe Corporation in 1988. Deluxe Corporation was founded in 1915 and is headquartered in Shoreview, Minnesota.

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, but faces challenges with high leverage and lower net profitability. Improvements in operational efficiency and debt reduction are necessary to enhance financial stability.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.12B	2.12B	2.19B	2.24B	2.02B	1.79B
	Gross Profit
1.12B	1.13B	1.16B	1.21B	1.14B	1.06B
	EBIT
191.72M	192.18M	160.79M	169.40M	204.10M	227.60M
	EBITDA
326.83M	365.32M	338.37M	386.45M	368.57M	159.77M
	Net Income Common Stockholders
65.16M	52.80M	26.12M	65.39M	62.63M	8.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
30.30M	34.40M	71.96M	40.40M	41.20M	123.10M
	Total Assets
2.57B	2.83B	3.08B	3.08B	3.07B	1.87B
	Total Debt
1.50B	1.56B	1.67B	1.69B	1.74B	868.40M
	Net Debt
1.47B	1.53B	1.59B	1.65B	1.70B	745.30M
	Total Liabilities
1.95B	2.21B	2.48B	2.47B	2.50B	1.33B
	Stockholders Equity
2.57B	620.92M	604.09M	604.20M	574.60M	540.80M
Cash Flow		Free Cash Flow
144.04M	99.89M	97.62M	86.90M	101.70M	155.00M
	Operating Cash Flow
217.99M	194.28M	198.37M	191.50M	210.80M	217.60M
	Investing Cash Flow
-73.88M	-69.84M	-43.30M	-80.30M	-1.07B	-56.10M
	Financing Cash Flow
-209.28M	-267.25M	-37.68M	-48.60M	913.00M	-110.60M

Deluxe Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.80
• 50DMA: Positive
• 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 DLX, the sentiment is Negative. The current price of 14.8 is above the 20-day moving average (MA) of 14.67, above the 50-day MA of 14.79, and below the 200-day MA of 18.17, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 48.68 is Neutral, neither overbought nor oversold. The STOCH value of 33.20 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	72 Outperform	$672.89M	12.07	9.10%	7.98%	-2.69%	61.73%
STGW	70 Outperform	$1.17B	858.82	0.19%	―	9.86%	―
QNST	62 Neutral	$862.82M	―	-0.29%	―	88.81%	99.16%
Sector *	61 Neutral	$14.74B	5.90	-4.02%	6.40%	2.72%	-31.67%
TSQ	55 Neutral	$115.77M	―	74.55%	11.30%	-0.16%	57.03%
NCMI	50 Neutral	$504.53M	―	-4.73%	1.12%	42.01%	-100.56%
CCO	48 Neutral	$571.22M	―	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.