One-glance verdict
Undervalued
$86.74 our estimate vs market $48.49
Wall Street consensus: $64.00 (-26.2% lower than our fair-value estimate)
44% below our estimate, below the bear case
Fundamentals snapshot
Donnelley Financial Solutions, Inc.
DFIN · NYQ · Technology · Software - Application
Current price
$48.49
52-week range
$36.11 - $56.26
Market cap
$1.19B
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 20% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 30.5% above its 5-year average P/E.
What this company does
Donnelley Financial Solutions, Inc.
Donnelley Financial Solutions sells software and services that help companies and investment funds prepare and file the complex financial paperwork required by government regulators. The company makes money from these legally mandatory tasks, which creates steady demand because clients must follow these rules to operate. This makes DFIN an essential, behind-the-scenes partner for businesses navigating the world of finance.
How the company got here
Originally part of the much larger printing company R.R. Donnelley & Sons, Donnelley Financial Solutions (DFIN) was spun off into its own separate, publicly traded company in 2016. This move allowed DFIN to focus entirely on its specialized area: providing software and services that help other companies handle complex financial regulations and communications. Since becoming independent, the company has concentrated on growing its technology offerings, moving from a legacy (older, more traditional) print-based business to a software-focused one. This shift emphasizes providing cloud-based tools to help clients manage their most important financial and regulatory documents.
What it actually does
Think of DFIN as a helper for big companies when they have to do complicated but mandatory financial paperwork. When a company wants to sell shares to the public for the first time (an Initial Public Offering or IPO), merge with another company, or file its required quarterly reports with the government, DFIN provides the specialized software and expert services to make sure it's all done correctly. Their products help create, manage, and submit these critical documents securely and efficiently. Essentially, DFIN's clients are other businesses, not everyday consumers, who need to navigate the complex rules of the financial world.
Capital Markets – Software Solutions (CM-SS)
This part of the business provides software tools for companies dealing with major financial events like buying another company or selling shares. Its main products are Venue, a secure online space called a virtual data room where companies can share sensitive documents, and ActiveDisclosure, a software that helps companies write and file their reports with the U.S. Securities and Exchange Commission (SEC), the government agency that oversees public companies. Companies pay for subscriptions or access to this software to make these high-stakes processes smoother and more secure. This is a significant and growing part of DFIN's business, representing a large portion of their software sales.
Capital Markets – Compliance and Communications Management (CM-CCM)
This segment is less about selling software and more about providing services that use technology. It helps companies with the hands-on work of preparing and distributing documents for big deals and for their regular SEC compliance (following the rules). This can include formatting documents, printing them when needed, and ensuring they get to the right people. While the company is moving more towards software, these tech-enabled services remain a very large piece of the business, making up the biggest single slice of the company's sales in the most recent year.
Investment Companies – Software Solutions (IC-SS)
This division focuses specifically on the needs of investment firms, like mutual funds and hedge funds (large pools of invested money). It provides a software platform called Arc Suite, which is a set of tools designed to help these firms manage their unique and complex regulatory paperwork. Investment companies pay to use this cloud-based system to assemble, edit, and file the specific documents required by regulators. This is a key area of DFIN's software business, tailored to a specific type of financial client.
Investment Companies – Compliance and Communications Management (IC-CCM)
Similar to its Capital Markets counterpart, this segment provides technology-backed services for investment companies. This includes helping them create and send out communications to their investors, such as proxy statements (materials for shareholder votes). They offer complete services that handle everything from planning and printing to mailing and tracking votes for shareholder meetings. This is a steady business that serves the ongoing communication needs of the investment management industry.
What management is betting on now
Management's strategy is focused on growing its software business to create more predictable, recurring revenue (income that comes in regularly from subscriptions). They are betting that clients will increasingly prefer their cloud-based software like ActiveDisclosure and Venue over traditional services. The company aims to be the go-to expert for the entire lifecycle of a company's financial reporting needs, from major transactions to routine compliance filings. By expanding their technology, they hope to become less dependent on the ups and downs of the deal market, such as mergers and IPOs, and build a more stable business based on software and deep regulatory expertise.
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 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 $86.74 vs current price $48.49
Wall Street consensus is the average analyst price target: $64.00 (-26.2% lower than our fair-value estimate).
Our most-likely fair value is $86.74 a share — about 78.9% above today's price of $48.49, 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 $555.14M 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 20% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 30.5% 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)
31.49x
Forward P/E
8.88x
P/B
3.09x
P/S
1.53x
EV/EBITDA
8.66x
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
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