One-glance verdict
Undervalued
$122.10 our estimate vs market $66.98
Wall Street consensus: $75.33 (-38.3% lower than our fair-value estimate)
45% below our estimate, below the bear case
Fundamentals snapshot
Donnelley Financial Solutions, Inc.
DFIN · NYQ · Technology · Software - Application
Current price
$66.98
52-week range
$36.11 - $72.03
Market cap
$1.63B
Balance sheet
Healthy
10.82x Adequate
Net debt $106.60M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 2.6% last year.
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 18.3% to 17.5% over 3 years.
What this company does
Donnelley Financial Solutions, Inc.
Donnelley Financial Solutions (DFIN) helps companies navigate complex financial paperwork for things like going public or reporting to regulators, essentially selling software and services to make these processes easier. Their money mostly comes from these essential services, which is important because businesses always need to file these documents, leading to steady income even when the economy is a bit shaky. This focus on necessary services means they often have strong margins (the percent of each sales dollar left after day-to-day business costs), which is a good sign for their financial health.
How the company got here
Donnelley Financial Solutions (DFIN) started in 1983 as a part of RR Donnelley, a large printing company. It became its own independent company in October 2016. Since then, DFIN has grown by acquiring other businesses, like eBrevia in 2018, which uses artificial intelligence for analyzing contracts, and Guardum in 2021, which focuses on data security. These moves show a strategy to expand its technology and data protection offerings within the financial services sector.
What it actually does
DFIN provides software and services that help companies manage financial regulations and compliance. Think of it as a digital assistant for businesses that need to report a lot of financial information to the government and their investors. Their tools help with tasks like preparing official documents for the stock market, managing sensitive information during business deals, and ensuring all financial communications are accurate and follow the rules. They serve a wide range of clients, from large public corporations to investment firms.
Capital Markets – Software Solutions (CM-SS)
This part of DFIN focuses on providing software to help public and private companies manage complex financial transactions and reporting requirements. For example, their Venue software acts like a secure digital room where companies can share important documents during mergers or acquisitions (M&A). ActiveDisclosure is another tool that helps companies prepare and file documents with the U.S. Securities and Exchange Commission (SEC), which is the government agency that oversees the stock market. This segment is crucial for companies going through significant financial events like an Initial Public Offering (IPO) or a merger.
Capital Markets – Compliance and Communications Management (CM-CCM)
This segment offers services that combine technology with human expertise to help companies with their deal-making processes and to ensure they meet SEC compliance rules. This includes services related to managing information for mergers and acquisitions, as well as handling the printing and distribution of important financial documents. Essentially, they provide a tech-enabled support system for companies navigating the complexities of financial deals and regulatory filings.
Investment Companies – Software Solutions (IC-SS)
DFIN's IC-SS segment provides a suite of cloud-based software tools, like the Arc Suite platform, specifically for investment companies such as mutual funds. These tools help these firms manage and store their compliance and regulatory information. They can use these solutions to easily access, assemble, edit, and submit documents to regulators and investors, making the process of staying compliant more streamlined and efficient.
Investment Companies – Compliance and Communications Management (IC-CCM)
This segment focuses on helping investment companies with their regulatory communications and investor relations. They offer services for creating, filing, and distributing important financial information, including filings required by the SEC. This can include managing the entire process for sending out shareholder reports, like proxy statements, which inform shareholders about company matters and upcoming votes.
What management is betting on now
DFIN's current strategy revolves around accelerating growth, improving overall performance, and upholding its core values. A key focus is on expanding its software solutions and technology-enabled services, as indicated by their investments in advanced technologies like Artificial Intelligence (AI). They are also emphasizing Environmental, Social, and Governance (ESG) compliance, recognizing its growing importance for businesses. This strategic direction aims to help clients scale confidently and navigate an increasingly complex regulatory landscape.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
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
FY2026 Q3
$85.80M
Revenue
$185.00M
Net income
$21.30M
Diluted EPS
0.85
Operating cash flow
$98.20M
Free cash flow
$85.80M
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $122.10 vs current price $66.98
Wall Street consensus is the average analyst price target: $75.33 (-38.3% lower than our fair-value estimate).
Our most-likely fair value is $122.10 a share — about 82.3% above today's price of $66.98, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $106.6M. Interest coverage 10.8x.
Net debt
$106.60M
Interest coverage
10.82x
Donnelley Financial Solutions, Inc. is healthier than 0 of 1 peers on balance-sheet leverage.
Healthy
Worse cushion
Baseline
Better cushion
DFIN
BASELINE
Donnelley Financial Solutions, Inc.
Total debt $133.80M Interest coverage 10.82x This is the baseline the peer rows are being compared against.
What you should know
The case for and against DFIN
2 Rewards
1 Risk
Rewards
-
Revenue grew 2.6% last year.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 18.3% to 17.5% over 3 years.
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)
17.58x
Forward P/E
11.87x
P/B
4.01x
P/S
2.07x
EV/EBITDA
10.74x
PEG ratio
0.97x
Profitability
How much profit each dollar creates
Gross margin
64.7%
Operating margin
17.5%
Net margin
12.4%
ROE
23.4%
ROA
12.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.33x
Current ratio
1.06x
Quick ratio
0.90x
Total debt
$133.80M
Total cash
$27.20M
Growth
How the business has been compounding
Revenue TTM
$787.20M
Revenue 5Y CAGR
-6.3%
EPS TTM
3.81
EPS 5Y CAGR
-28.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$227.10M
Free CF TTM
$107.80M
FCF margin
13.7%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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