Growth For The Quarter Ended 2020-12-31
Deluxe Corp does not report a stunning amount of sales growth. It is not positive. With that, investors will appreciate DLX’s gross profit margin of 59%. Last year, the company showed sales of $1790. 781 million.
DLX does not report substantial EBITDA growth. Nevertheless the company’s EBITDA ratio is equal to 18%. I do appreciate it. The EBITDA growth is negative because the sales expenditure increased a 79%.
Balance Sheet Statement As Of 2020-12-31
With an A/L ratio of more than 1x, DLX’s balance sheet looks stable. In Q4, the total amount of assets was equal to $1874 million, with total liabilities of $1334 million.
As for me, I think that Deluxe Corp shows a large amount of goodwill. It is equal to $736 million. It is difficult to know the real value of intangibles and goodwill. All in all, there is a potential goodwill impairment risk. Deluxe Corp could review and impair intangible assets, which will most likely lead to a decline in the share price. The balance sheet shows deferred revenue of $42 million, which I like. Deferred revenue represents a prepayment by DLX’s clients that have yet to be delivered. Hence, Deluxe Corp receives money in advance of it being earned. Besides, Deluxe Corp has positive working capital, which market participants will like. It means that DLX can cover its short-term liabilities when they come due.
DLX’s short term debt is less significant than the company’s cash. In my experience, Deluxe Corp may not have to worry about any liquidity risk. DLX’s debt to equity ratio is below 2x. In summary, the debt level appears to be under control. Note that Deluxe Corp reports cash and cash equivalents of $123 million, and net debt of $717 million. DLX trades at 25x EBITDA, which may not seem cheap. But, with the company’s EBITDA margin of 18% the EV/EBITDA ratio makes sense. null
Quarterly Figures For The Quarter Ended 2020-12-31
In Q4 DLX reported quarterly sales of $454 million, and gross profit of $262 million. The gross profit margin was equal to 57%. In addition, DLX is profitable, which is favorable. Deluxe Corp released positive quarterly EBITDA of $83. 228 million. The numbers seem useful. DLX also released positive net income of $24. 663 million. I believe that considering the quality of the business, I see room for DLX to grow into its valuation over time.
Deluxe Corp has a market cap of $1826 million. The enterprise value is equal to $2145 million. With forward sales of $1790 million, DLX sells at less than 2x forward sales. In my experience, traders will most likely believe that Deluxe Corp is cheap. Institutional investors EVERENCE CAPITAL MANAGEMENT, AdvisorNet Financial, Inc, and Louisiana State Employees Retirement System are Deluxe Corp investors. The company shows a beta of 1. 51372. It is more vast than 1, which means that the stock price can show substantial volatility. DLX’s stock price volatility is larger than that of the market. Hence, if you are not a volatility expert don’t trade Deluxe Corp.
The following DLX’s insiders acquired or sold equity recently.DLX’s traders will most likely study this information:
+In 2021-04-09, officer: SVP, CHRO Elliott Jane Marie acquired equity of DLX.
+In 2021-04-09, officer: SVP, CHRO Elliott Jane Marie sold stock of DLX.
+In 2021-04-09, officer: SVP, CHRO Elliott Jane Marie sold equity of DLX.
About Deluxe Corp
Deluxe Corporation provides printed business forms, checks, marketing solutions, accessories, and other products and services for small businesses and financial institutions. It operates through three segments: Small Business Services, Financial Services, and Direct Checks. The company provides marketing materials and promotional solutions, such as postcards, brochures, retail packaging supplies, apparel, greeting cards, and business cards; and treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing, and paperless treasury management, as well as software, hardware and digital imaging solutions.