One-glance verdict
Undervalued
$97.41 our estimate vs market $47.38
Wall Street consensus: $64.00 (-34.3% lower than our fair-value estimate)
51% below our estimate, below the bear case
Fundamentals snapshot
Donnelley Financial Solutions, Inc.
DFIN · NYQ · Technology · Software - Application
Current price
$47.38
52-week range
$36.11 - $58.45
Market cap
$1.16B
Balance sheet
Watch
10.82x Adequate
Net debt $186.40M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 1.4% last year.
- Reward Returns 8.6% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 27.6% above its 5-year average P/E.
What this company does
Donnelley Financial Solutions, Inc.
Donnelley Financial Solutions provides legally-required software and services that help companies manage their complex financial paperwork and government filings. The company makes most of its money from businesses and investment firms that must comply with strict regulations, like when they sell stock to the public or communicate with investors. Because these services are mandatory for its clients to operate, DFIN benefits from a consistent and recurring need (customers who must come back for these services again and again).
How the company got here
Donnelley Financial Solutions, or DFIN, started as a part of a larger printing company, R.R. Donnelley & Sons, back in 1983. For decades, it handled the specialized financial printing and communication needs of that business. In 2016, it was spun off to become its own independent, publicly traded company. This move allowed DFIN to focus entirely on helping companies navigate the complex world of financial regulations. Since becoming independent, the company has been strategically shifting from a service-based and printing business to a technology-focused one, emphasizing software that clients can use for their regulatory and compliance needs.
What it actually does
Think of DFIN as a helper for companies when they need to communicate with government regulators and their investors. When a company sells shares to the public, merges with another company, or files its required quarterly financial reports, there are very specific and complicated rules they must follow. DFIN provides the software and services to make sure all that paperwork is done correctly and securely. This includes everything from secure online spaces for sharing sensitive documents during a deal to software that helps prepare and file reports with the U.S. Securities and Exchange Commission (SEC), the government agency that oversees public companies.
Capital Markets – Software Solutions (CM-SS)
This part of the business provides software that other companies use to manage their most sensitive financial events. For example, its 'Venue' product is a secure online 'data room' where companies can share confidential documents when they are preparing for a big transaction like a merger or an acquisition (when one company buys another). Another key product, 'ActiveDisclosure', is a software tool that helps public companies prepare and file their required reports with the SEC. Companies pay subscription fees to use this software, which provides DFIN with a steady, recurring stream of revenue (income that is predictable and likely to continue in the future).
Capital Markets – Compliance and Communications Management (CM-CCM)
This segment is less about selling software and more about providing services, often with the help of technology. It helps companies with the hands-on work of creating and distributing documents for big deals and for their regular SEC compliance filings. This can include formatting documents, printing them, and sending them out. While the company is focusing more on software, this services business is built on long-standing relationships with clients who trust DFIN to handle these critical, deadline-driven projects correctly.
Investment Companies – Software Solutions (IC-SS)
This division focuses specifically on the needs of investment companies, like mutual funds and exchange-traded funds (ETFs). It provides a set of cloud-based software tools called the 'Arc Suite'. These tools help investment managers handle their unique and complex regulatory paperwork. For instance, the software helps them assemble, edit, and file the specific documents required by regulators for investment products. Just like the Capital Markets software, this segment makes money primarily through recurring software subscriptions.
Investment Companies – Compliance and Communications Management (IC-CCM)
Similar to its Capital Markets counterpart, this segment provides technology-enabled services for investment companies. It helps these firms create, file, and distribute their regulatory and investor communications. A major service here is helping with proxy statements (the materials sent to shareholders to vote on company matters). DFIN can manage the entire process, from planning and printing to mailing and collecting votes, providing expert support along the way.
What management is betting on now
DFIN's main strategy is to continue its transformation into a software-first company. Management is focused on growing the revenue that comes from its subscription-based software products, like ActiveDisclosure and Arc Suite, because this income is more predictable than project-based work. They aim to sell more software to their existing large customer base that already uses their traditional services. The company is also investing in technology like artificial intelligence to make its compliance and risk management tools smarter and more efficient for its clients.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$67.30M
FY2024 Q4
$41.30M
FY2025 Q1
$-51.00M
FY2025 Q2
$51.70M
FY2025 Q3
$59.20M
FY2025 Q4
$47.90M
FY2026 Q1
$-16.00M
FY2026 Q2
$61.20M
Revenue
$224.20M
Net income
$36.40M
Diluted EPS
1.44
Operating cash flow
$74.70M
Free cash flow
$61.20M
Fetching…
Sources
Revenue
$205.50M
Net income
$33.50M
Diluted EPS
1.27
Operating cash flow
$-5.60M
Free cash flow
$-16.00M
Fetching…
Sources
Revenue
$172.50M
Net income
$6.20M
Diluted EPS
0.31
Operating cash flow
$59.80M
Free cash flow
$47.90M
Fetching…
Sources
Revenue
$175.30M
Net income
$-40.90M
Diluted EPS
-1.49
Operating cash flow
$74.40M
Free cash flow
$59.20M
Fetching…
Sources
Revenue
$218.10M
Net income
$36.10M
Diluted EPS
1.28
Operating cash flow
$68.40M
Free cash flow
$51.70M
Fetching…
Sources
Revenue
$201.10M
Net income
$31.00M
Diluted EPS
1.05
Operating cash flow
$-37.70M
Free cash flow
$-51.00M
Fetching…
Sources
Revenue
$156.30M
Net income
$6.30M
Diluted EPS
0.21
Operating cash flow
$56.40M
Free cash flow
$41.30M
Fetching…
Sources
Revenue
$179.50M
Net income
$8.70M
Diluted EPS
0.29
Operating cash flow
$86.40M
Free cash flow
$67.30M
Fetching…
Sources
Is it cheap or expensive?
Fair value $97.41 vs current price $47.38
Wall Street consensus is the average analyst price target: $64.00 (-34.3% lower than our fair-value estimate).
Our most-likely fair value is $97.41 a share — about 105.6% above today's price of $47.38, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $186.4M. Interest coverage 10.8x.
Net debt
$186.40M
Interest coverage
10.82x
Donnelley Financial Solutions, Inc.'s profit covers its interest bill about 10.8 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
DFIN
BASELINE
Donnelley Financial Solutions, Inc.
Total debt $211.70M Interest coverage 10.82x This is the baseline the peer rows are being compared against.
Total debt $792.68M Interest coverage -3.32x -100% vs DFIN This peer has almost no interest-payment cushion compared with DFIN.
Total debt $690.74M Interest coverage 3.96x -63% vs DFIN Carries about 2.7x less debt cushion than DFIN.
Total debt $7.78B Interest coverage 3.31x -69% vs DFIN Carries about 3.3x less debt cushion than DFIN.
Total debt $425.65M Interest coverage 7.78x -28% vs DFIN Carries about 1.4x less debt cushion than DFIN.
Total debt $40.93M Interest coverage 8.11x -25% vs DFIN Carries about 1.3x less debt cushion than DFIN.
What you should know
The case for and against DFIN
3 Rewards
1 Risk
Rewards
-
Revenue grew 1.4% last year.
-
Returns 8.6% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 27.6% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.77x
Forward P/E
8.68x
P/B
3.02x
P/S
1.50x
EV/EBITDA
8.49x
PEG ratio
0.97x
Profitability
How much profit each dollar creates
Gross margin
64.2%
Operating margin
25.8%
Net margin
4.5%
ROE
8.6%
ROA
11.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.55x
Current ratio
1.33x
Quick ratio
1.14x
Total debt
$211.70M
Total cash
$25.30M
Growth
How the business has been compounding
Revenue TTM
$777.50M
Revenue 5Y CAGR
-6.3%
EPS TTM
1.54
EPS 5Y CAGR
-28.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$203.30M
Free CF TTM
$107.80M
FCF margin
13.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—