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Deluxe Corp. (DLX)
NYSE:DLX

Deluxe (DLX) AI Stock Analysis

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Deluxe

(NYSE:DLX)

68Neutral
Deluxe's strong cash flow and attractive dividend yield are key strengths, offset by high leverage and challenges in the Print segment. The technical analysis indicates bearish trends, but the company's focus on the growing Data segment and strategic partnerships provides a balanced outlook. Valuation metrics suggest the stock is potentially undervalued, making it appealing to income-focused investors despite existing 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 (DLX) vs. S&P 500 (SPY)

Deluxe Business Overview & Revenue Model

Company DescriptionDeluxe 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 MoneyDeluxe 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 solid financial health with strong cash flow management and gross profit margins. However, the company faces challenges with high leverage and lower net profitability, which could pose risks if not managed carefully. Continued focus on improving operational efficiencies and reducing debt could enhance financial stability and shareholder value.
Income Statement
70
Positive
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
65
Positive
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
75
Positive
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.12B2.19B2.24B2.02B1.79B
Gross Profit
1.13B1.16B1.21B1.14B1.06B
EBIT
192.18M160.79M169.40M204.10M227.60M
EBITDA
365.32M338.37M386.45M368.57M159.77M
Net Income Common Stockholders
52.80M26.12M65.39M62.63M8.80M
Balance SheetCash, Cash Equivalents and Short-Term Investments
34.40M71.96M40.40M41.20M123.10M
Total Assets
2.83B3.08B3.08B3.07B1.87B
Total Debt
1.56B1.67B1.69B1.74B868.40M
Net Debt
1.53B1.59B1.65B1.70B745.30M
Total Liabilities
2.21B2.48B2.47B2.50B1.33B
Stockholders Equity
620.92M604.09M604.20M574.60M540.80M
Cash FlowFree Cash Flow
99.89M97.62M86.90M101.70M155.00M
Operating Cash Flow
194.28M198.37M191.50M210.80M217.60M
Investing Cash Flow
-69.84M-43.30M-80.30M-1.07B-56.10M
Financing Cash Flow
-267.25M-37.68M-48.60M913.00M-110.60M

Deluxe Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price15.08
Price Trends
50DMA
15.56
Negative
100DMA
18.55
Negative
200DMA
19.34
Negative
Market Momentum
MACD
-0.22
Negative
RSI
48.07
Neutral
STOCH
35.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLX, the sentiment is Neutral. The current price of 15.08 is above the 20-day moving average (MA) of 14.83, below the 50-day MA of 15.56, and below the 200-day MA of 19.34, indicating a neutral trend. The MACD of -0.22 indicates Negative momentum. The RSI at 48.07 is Neutral, neither overbought nor oversold. The STOCH value of 35.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DLX.

Deluxe Risk Analysis

Deluxe disclosed 24 risk factors in its most recent earnings report. Deluxe reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Deluxe Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DLDLX
68
Neutral
$674.34M12.789.09%7.96%-2.69%
68
Neutral
$1.07B-5.52%68.99%84.85%
66
Neutral
$2.35B285.280.66%12.18%
59
Neutral
$13.76B7.65-2.18%3.85%2.32%-36.56%
50
Neutral
$540.69M-5.27%0.53%45.67%-100.72%
TSTSQ
50
Neutral
$113.32M74.55%11.27%-0.72%67.36%
CCCCO
45
Neutral
$536.45M4.92%-13.48%55.39%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DLX
Deluxe
15.08
-5.67
-27.33%
CCO
Clear Channel Outdoor
1.08
-0.45
-29.41%
STGW
Stagwell
5.62
-1.28
-18.55%
NCMI
National Cinemedia
5.68
0.88
18.33%
QNST
Quinstreet
18.96
-0.03
-0.16%
TSQ
Townsquare Media
7.03
-4.72
-40.17%

Deluxe Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 3.29%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong growth in the Data segment and strategic partnerships offsetting declines in the Print segment and concerns over macroeconomic and tariff impacts. While significant achievements were noted, ongoing challenges in certain segments and broader economic uncertainties tempered the overall outlook.
Q1-2025 Updates
Positive Updates
Record Expansion in Data Segment
The Data segment revenue grew 29% versus the prior year, driven by significant demand from financial institutions and the addition of 17 new customer logos.
Overall Revenue and Earnings Growth
Total revenue for the quarter was over $536 million, up 1.4% on a comparable adjusted basis year-over-year. Comparable adjusted EBITDA increased nearly 3.5% from 2024.
Debt Reduction and S&P Ratings Upgrade
The company reduced net debt to $1.46 billion, down approximately $80 million from the prior year, contributing to an S&P ratings upgrade.
Successful Partnerships and Customer Wins
New and expanded FI relationships, including a partnership with TowneBank, were highlighted as examples of the company's ability to win larger scale financial institution partnerships.
Negative Updates
Decline in Print Segment
The Print segment revenue declined by 4% year-over-year, with legacy check revenues declining 1.8% and other print products declining at 7%.
Promotional Products Demand Softness
Ongoing demand softness was observed within shorter-cycle discretionary branded promo products, contributing to an anticipated increased rate of decline in the Print segment for the second quarter.
Tariff and Economic Uncertainty
Economic volatility and macroeconomic uncertainty were acknowledged, with specific mention of potential impacts from tariffs on smaller promotional product areas.
Company Guidance
During the Deluxe Quarterly Earnings Conference Call for the first quarter of fiscal year 2025, several key metrics were highlighted, demonstrating the company's performance and future guidance. Deluxe reported total revenue of $536.5 million, reflecting a 1.4% year-over-year increase on a comparable adjusted basis. The company's adjusted EBITDA reached $100.2 million, marking a 3.4% increase compared to the previous year, with an EBITDA margin of 18.7%, up by 40 basis points. Comparable adjusted EPS was recorded at $0.75, showing a 4% growth. The Data Solutions segment experienced significant growth, with revenues increasing by 29.3% year-over-year. The company also reported a substantial improvement in free cash flow, which increased by $18.1 million to $24.3 million. Deluxe maintained a net debt level of $1.46 billion, achieving a leverage ratio of 3.6 times. Despite macroeconomic uncertainties, Deluxe maintained its guidance ranges for 2025, aiming for continued revenue and EBITDA growth while focusing on debt reduction.

Deluxe Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Deluxe Appoints Morgan Schuessler to Board of Directors
Positive
Feb 21, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.