Deluxe Earnings Preview

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Watch Deluxe's (NYS: DLX) earnings report to see if it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings Thursday. Deluxe provides personalized printed items, promotional products and merchandising materials, Web hosting and other web services, fraud prevention and marketing services, and financial institution customer loyalty and retention programs.

What analysts say:

  • Buy, sell, or hold?: Analysts generally think investors should hang on to Deluxe, with half rating the stock a hold. Analysts don't like Deluxe as much as competitor Ennis overall. One out of one analysts rate Ennis a buy compared with two of four for Deluxe. That rating hasn't budged in three months as analysts have remained steadfast in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $345.2 million in revenue this quarter. That would represent a decline of 0.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.71 per share. Estimates range from $0.68 to $0.73.

What our community says:
CAPS All-Stars are solidly behind the stock, with 90.7% granting it an "outperform" rating. The community at large concurs with the All-Stars, with 89.5% awarding it a rating of "outperform." Fools are keen on Deluxe, though the message boards have been quiet lately with only 84 posts in the past 30 days. Despite the majority sentiment in favor of Deluxe, the stock has a middling CAPS rating of three out of five stars.

Management:
Deluxe's profit has risen year over year by an average of 27.6%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

65.6%

64.0%

67.0%

65.0%

Operating Margin

19.3%

17.3%

24.1%

18.2%

Net Margin

9.3%

9.9%

13.8%

9.7%

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At the time this article was published

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