Donnelley Financial Solutions

DFIN

Financial - Capital Markets · Financial Services

Price

$49.95

+0.01 (+0.02%)

Market Cap

$1.25B

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−19.9% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 35.2M (2021) → 28.2M (2025)

Donnelley Financial Solutions helps companies handle the paperwork and filings required by financial regulators. Its main products include software and services that help businesses prepare documents like annual reports, merger filings, and SEC disclosures. Its customers are mostly corporations, investment funds, and law firms that need to meet strict legal filing requirements.

The company makes money through a mix of software subscriptions and one-time fees for services tied to specific transactions like IPOs or mergers. It operates mainly in the United States, with some international presence, and generates roughly $900 million in annual revenue. Its competitive edge comes from deep regulatory expertise and software tools that are embedded in customers' compliance workflows, making it costly to switch providers. The biggest risk is that deal activity — IPOs, mergers, and capital raises — can slow sharply during economic downturns, which directly reduces demand for its transaction-related services.

Winston Score History

Score breakdown

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Quality

Gross Margin

56.7%

Premium pricing power — 56.7% gross margin

Operating Margin

23.9%

Excellent — 23.9% operating margin

ROCE

8.1%

Below par — 8.1% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

-1.1%

Shrinking sales (-1.1% YoY)

EPS YoY

-56.5%

Earnings shrinking (-56.5% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

564%

Turns 564% of profit into real cash

FCF Margin

18.5%

Converts sales into free cash efficiently (18.5%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.62

Moderate — manageable debt (0.62)

Interest Cover

11.09x

Comfortably covers interest (11.1x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

37.0x

Pricey — P/E 37.0

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+27.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (37.0 → 9.7)

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Dividends

Not applicable for this business.

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