Many stocks have been testing new highs in 2020, and one of the most notable is Deluxe Corporation (DLX). Currently, DLX is trading at $31.80 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $37.00.
To add more color to this target, the company’s high over the last year is $54.15 and the low is $18.90. Over the last 52 weeks, DLX is down -41.27% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, DLX reported a profit of $284.37 million. Deluxe Corporation also saw revenues increase to $486.42 million. In addition, DLX has free cash flow of $12.2 million as of 03-2020 The company’s EBITDA came in at -$25.31 million which compares well with its peers.
About Deluxe Corporation
If readers are unfamiliar, 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. It also offers Web services comprising web hosting and domain name, logo and web design, payroll, email marketing, search engine marketing and optimization, and business incorporation and organization services; strategic targeting, lead optimization, retention, and cross-selling services; and fraud protection and security services, electronic checks and deposits, and digital engagement solutions, including loyalty and rewards programs and financial management tools. In addition, the company provides checks; printed business forms, such as deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices, and personnel forms, as well as computer forms; and customized products comprising envelopes, office supplies, ink stamps, labels, check registers, and checkbook covers. It operates in the United States, Canada, Australia, South America, and Europe. The company was formerly known as Deluxe Check Printers, Incorporated and changed its name to Deluxe Corporation in 1988. Deluxe Corporation was founded in 1915 and is headquartered in Shoreview, Minnesota.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. DLX has a short ratio of 5.05 and outstanding shares of 42.03M.
DLX has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.67 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -7.07. Deluxe Corporation DLX also noted assets of $2.04 billion at the end of the last quarter. Investors should also keep an eye on sector updates as DLX has historically followed its peers on positive news.
All told, Deluxe Corporation DLX has strung together solid data and demonstrated underlying fundamentals. At its current valuation, DLX represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Deluxe Corporation DLX is now commanding a market cap of 1.33B and a float of 41.47M. DLX is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of DLX stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in DLX, either long or short, and we have not been compensated for this article.