Donnelley Financial Solutions, Inc.

DFIN

Services-Miscellaneous Business Services

Mkt Cap

$1.777B

PE

17.82

Debt

$204.5M

Cash

$43.7M

EV

$1.938B

FCF

$84.1M

Market Cap

$1.777B

P/E Ratio

17.82

Debt

$204.5M

Cash

$43.7M

EV

$1.938B

FCF

$84.1M

Charts data: {"Earnings":[{"time":"2014-12-30","value":57400000},{"time":"2015-12-30","value":104300000},{"time":"2016-12-30","value":59100000},{"time":"2017-12-30","value":9700000},{"time":"2018-12-30","value":73600000},{"time":"2019-12-30","value":37600000},{"time":"2020-12-30","value":-25900000},{"time":"2021-12-30","value":145900000},{"time":"2022-12-30","value":102500000},{"time":"2023-12-30","value":82200000}],"Sales":[{"time":"2014-12-30","value":1080100000},{"time":"2015-12-30","value":1049500000},{"time":"2016-12-30","value":983500000},{"time":"2017-12-30","value":1004900000},{"time":"2018-12-30","value":963000000},{"time":"2019-12-30","value":874700000},{"time":"2020-12-30","value":894500000},{"time":"2021-12-30","value":993300000},{"time":"2022-12-30","value":833600000},{"time":"2023-12-30","value":797200000}],"Net Margins":[{"time":"2014-12-30","value":0.053143227478937134},{"time":"2015-12-30","value":0.0993806574559314},{"time":"2016-12-30","value":0.06009150991357397},{"time":"2017-12-30","value":0.00965270176136929},{"time":"2018-12-30","value":0.07642782969885774},{"time":"2019-12-30","value":0.04298616668572082},{"time":"2020-12-30","value":-0.028954723309111235},{"time":"2021-12-30","value":0.1468841236283097},{"time":"2022-12-30","value":0.12296065259117082},{"time":"2023-12-30","value":0.10311088810837933}],"Assets":[{"time":"2015-12-30","value":817600000},{"time":"2016-12-30","value":978900000},{"time":"2017-12-30","value":893500000},{"time":"2018-12-30","value":868700000},{"time":"2019-12-30","value":886900000},{"time":"2020-12-30","value":865600000},{"time":"2021-12-30","value":883300000},{"time":"2022-12-30","value":828300000},{"time":"2023-12-30","value":806900000}],"Stockholders Equity":[{"time":"2014-12-30","value":351500000},{"time":"2015-12-30","value":623500000},{"time":"2016-12-30","value":111100000},{"time":"2017-12-30","value":149400000},{"time":"2018-12-30","value":226000000},{"time":"2019-12-30","value":268600000},{"time":"2020-12-30","value":247800000},{"time":"2021-12-30","value":377000000},{"time":"2022-12-30","value":329500000},{"time":"2023-12-30","value":402200000}],"ROE":[{"time":"2014-12-30","value":0.16330014224751066},{"time":"2015-12-30","value":0.16728147554129913},{"time":"2016-12-30","value":0.531953195319532},{"time":"2017-12-30","value":0.06492637215528782},{"time":"2018-12-30","value":0.3256637168141593},{"time":"2019-12-30","value":0.13998510796723754},{"time":"2020-12-30","value":-0.10451977401129943},{"time":"2021-12-30","value":0.3870026525198939},{"time":"2022-12-30","value":0.3110773899848255},{"time":"2023-12-30","value":0.20437593237195426}],"ROA":[{"time":"2015-12-30","value":0.21135029354207435},{"time":"2016-12-30","value":0.10828480948002861},{"time":"2017-12-30","value":0.11091214325685507},{"time":"2018-12-30","value":0.16046966731898238},{"time":"2019-12-30","value":0.10170255947682941},{"time":"2020-12-30","value":0.004158964879852125},{"time":"2021-12-30","value":0.24827351975546247},{"time":"2022-12-30","value":0.17505734637208742},{"time":"2023-12-30","value":0.13632420374271906}]}

Donnelley Financial Solutions, Inc. operates as a risk and compliance solutions company worldwide. The company operates through four segments: Capital Markets Software Solutions (CM-SS), Capital Markets Compliance and Communications Management (CM-CCM), Investment Companies Software Solutions (IC-SS), and Investment Companies Compliance and Communications Management (IC-CCM). The CM-SS segment provides Venue, ActiveDisclosure, eBrevia, and other solutions to public and private companies to manage public and private transactional and compliance processes; extract data and analyze contracts; collaborate; and tag, validate, and file SEC documents. The CM-CCM segment offers tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro, and ArcRegulatory, as well as services that enable storage and management of compliance and regulatory information in a self-service and central repository for accessing, assembling, editing, translating, rendering, and submitting documents to regulators and investors. The IC-CCM segment offers its investment companies clients with tech-enabled services to prepare, file, and distribute registration forms, as well as XBRL-formatted filings pursuant to the Investment Act, through the SEC's EDGAR system. This segment also provides print and distribution solutions for its clients to communicate with their investors. Donnelley Financial Solutions, Inc. was founded in 1983 and is headquartered in Chicago, Illinois.

Sector

NVEE

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
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6/30/21
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3/31/21
10-K
12/31/20
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9/30/20
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6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Donnelley Financial Solutions, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$84.1M	$96.11M	$108.8M	$122.1M	$135.8M	$149.6M	$163.2M	$176.4M	$188.9M	$200.3M	$210.3M	$2.103B
DCF		$83.57M	$82.3M	$80.3M	$77.64M	$74.37M	$70.57M	$66.33M	$61.75M	$56.93M	$51.98M	$519.8M
Value	$1.226B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 16%

Earnings Stability 2.9%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	9.9%	6%	0.97%	7.6%	4.3%	-2.9%	15%	12%	10%	12%
ROA	21%	11%	11%	16%	10%	0.42%	25%	18%	14%	16%
ROE	17%	53%	6.5%	33%	14%	-10%	39%	31%	20%	24%

What is the average Net Margin?

The average Net Margin over the past 5 years is +7.72%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.57%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +13.77%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.98%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +21.06%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +1.14%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	7.52	7.39	12.76	30.52	1.87	0.90	1.76	2.00	2.43
Debt Equity	0.03	5.40	3.15	1.65	1.10	0.93	0.33	0.51	0.31	0.50
MIN
Graham Stability	-	-	13%	100%	79%	-64%	100%	100%	100%	-64%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.43.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -4.03.

What is the Graham’s Stability?

Graham’s Stability measure stands at -0.64.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	-3%	-3.7%	-3.8%	-4.4%	-0.19%
Net Income	4.8%	2.2%	-	-20%	-12%
Stockholders Equity	20%	12%	18%	22%	-0.6%
FCF	-3.5%	16%	-20%	-35%	19%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is -3.71%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -0.19%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +2.23%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -11.84%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +12.22%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.6%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +16.33%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +18.53%.