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Donnelley Financial Solutions (DFIN) Outpaces Stock Market Gains: What You Should Know

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Donnelley Financial Solutions (DFIN - Free Report) closed the most recent trading day at $30.02, moving +1.32% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.57%. At the same time, the Dow added 0.7%, and the tech-heavy Nasdaq gained 0.08%.

Heading into today, shares of the financial communications and data services provider had lost 10.89% over the past month, outpacing the Computer and Technology sector's loss of 11.12% and lagging the S&P 500's loss of 5.26% in that time.

Donnelley Financial Solutions will be looking to display strength as it nears its next earnings release, which is expected to be May 5, 2022. The company is expected to report EPS of $1.10, down 4.35% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $220.4 million, down 10.15% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.73 per share and revenue of $906 million. These totals would mark changes of -3.27% and -8.79%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Donnelley Financial Solutions. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Donnelley Financial Solutions is currently a Zacks Rank #5 (Strong Sell).

Valuation is also important, so investors should note that Donnelley Financial Solutions has a Forward P/E ratio of 6.26 right now. Its industry sports an average Forward P/E of 34.6, so we one might conclude that Donnelley Financial Solutions is trading at a discount comparatively.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 148, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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