With shares of Pitney Bowes Inc. (NYSE:PBI) trading at around $14.41, is PBI an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Is Pitney Bowes experiencing a Dead Cat Bounce, or will the stock build on its recent ascent? Let’s take a look at the basics before delving deeper. Q4 revenue came in at $1.29 billion versus an expectation of $1.28 billion. Q4 EPS came in at $0.56 versus an expectation of $0.51, according to analysts polled by FactSet. This was the first time since 2008 that the company saw year-over-year growth in Management Services. There was also year-over-year revenue growth in International Mailing, Software, and Mail Services. FY2012 revenue came in at $4.90 billion, and FY2012 EPS was $2.21. These were both declines compared to 2011.
FY2013 guidance is for EPS of $1.85 to $2.00. FY2013 revenue is expected to be flat to 3 percent. Free cash flow is expected to be between $600 and $700 million. Pitney Bowes anticipates growth in the Enterprise Solutions Group, and a decline in the SMB Solutions Group. Revenue is expected to benefit from growth in new e-commerce, print outsourcing, software solutions, and improving trends in equipment sales. A decline in revenue streams will moderate and have less of an impact in H2 2013. However, expenses are likely to be higher in 2013.
Let’s take a look at some important numbers prior to forming an opinion on the stock.