Down 10%, Is This Market Share Leader a Buy?
Securities and Exchange Commission (SEC) compliance leader Donnelley Financial Solutions (NYSE: DFIN) recently reported second-quarter earnings that show marked advancement in its attempt to transform its stodgy, old-school investment and corporate clients into its software solutions. But are shares attractively valued?
Last week, Donnelley reported solid second-quarter numbers that revealed a 14.5% jump in adjusted earnings per share to $1.42. Management attributed the increase to structural cost reductions and growth in higher-margin software revenue. The company experienced 12.7% growth in compliance software and 7.5% growth in its software solutions business over the second quarter of last year.
Though it should be noted that revenue was down 0.5% overall. Donnelley provides compliance, record-keeping, and legal services to the mergers and acquisitions (M&A), initial public offering (IPO), and capital markets transaction industry. The earnings reported pointed to a substantial reduction in transactions due to the dying special purpose acquisition company (SPAC) boom that Donnelley gladly served in last year. Despite revenue from capital markets being down 22% from a robust second quarter last year, Donnelley outperformed its competitors.
Source Fool.com
