Pitney Bowes Inc /De/ (NYSE: PBI)

Sector: Industrials Industry: Integrated Freight & Logistics CIK: 0000078814
Market Cap 1.89 Bn
P/B 21.90
P/E 10.56
P/S 0.58
ROIC (Qtr) 10.40
Div Yield % 6.84
Rev 1y % (Qtr) -7.97
Total Debt (Qtr) 2.23 Bn
Debt/Equity (Qtr) -3.36
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About

Pitney Bowes Inc. (PBI) is a global shipping and mailing company that operates in the technology, logistics, and financial services sector. The company's main business activities revolve around providing solutions that simplify and streamline the sending, tracking, and receiving of letters, parcels, and flats. Pitney Bowes Inc. has a significant global presence, with operations spanning across various countries and regions. The company generates revenue through its three main segments: Global Ecommerce, Presort Services, and SendTech Solutions....

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Investment thesis

Bull case

  • Healthy cash reserves of 320.99M provide 7.43x coverage of short-term debt 43.18M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 296.04M provides strong 13.94x coverage of stock compensation 21.24M, indicating sustainable incentive practices.
  • Robust free cash flow of 227.83M exceeds capital expenditure of 68.21M by 3.34x, indicating strong organic growth funding capability.
  • Tangible assets of 2.49B provide exceptional 34.26x coverage of deferred revenue 72.77M, showing strong service capability backing.
  • Operating cash flow of 296.04M provides strong 4.07x coverage of deferred revenue 72.77M, indicating service delivery capability.

Bear case

  • Operating cash flow of 296.04M barely covers its investment activities of (93.24M), with a coverage ratio of -3.18, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 296.04M provides thin coverage of dividend payments of (46.02M) with a -6.43 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (93.24M) provide weak support for R&D spending of 21.27M, which is -4.38x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 320.99M provide limited coverage of acquisition spending of (2.20M), which is -145.91x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 161.70M relative to inventory of 75.70M (2.14 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Integrated Freight & Logistics
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FDX Fedex Corp 99.67 Bn 20.28 1.11 37.77 Bn
2 UPS United Parcel Service Inc 98.11 Bn 17.61 1.11 28.59 Bn
3 JBHT Hunt J B Transport Services Inc 28.29 Bn 145.14 7.91 1.60 Bn
4 EXPD Expeditors International Of Washington Inc 22.29 Bn 27.40 2.13 0.56 Bn
5 CHRW C. H. Robinson Worldwide, Inc. 21.34 Bn 36.35 1.31 1.43 Bn
6 ZTO ZTO Express (Cayman) Inc. 20.15 Bn 16.23 3.02 1.74 Bn
7 GXO GXO Logistics, Inc. 7.46 Bn 83.79 0.58 5.50 Bn
8 LSTR Landstar System Inc 5.11 Bn 28.60 1.06 0.13 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.32 1.04
EV to Cash from Ops. EV/CFO 12.44 -0.78
EV to Debt EV to Debt 1.93 -1.98
EV to EBIT EV/EBIT 14.66 10.54
EV to EBITDA EV/EBITDA 10.63 9.04
EV to Free Cash Flow [EV/FCF] EV/FCF 20.60 -2.76
EV to Market Cap EV to Market Cap 2.27 0.62
EV to Revenue EV/Rev 1.31 -0.31
Price to Book Value [P/B] P/B 21.90 4.96
Price to Earnings [P/E] P/E 10.56 15.82
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.74 0.95
Dividend Payout Ratio % Div Payout % (Qtr) 55.30 14.92
Dividend per Basic Share Div per Share (Qtr) 0.26 0.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 19.64 11.81
Interest Coverage Int. cover (Qtr) 2.08 -430.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 12.67 -2,938.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -42.84 139.78
Dividend Growth (1y) % Div 1y % (Qtr) 30.00 -0.23
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 149.66 -442.31
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 102.31 -224.47
EBIT Growth (1y) % EBIT 1y % (Qtr) 149.64 -367.92
EBT Growth (1y) % EBT 1y % (Qtr) 120.50 -191.62
EPS Growth (1y) % EPS 1y % (Qtr) 121.27 -974.30
FCF Growth (1y) % FCF 1y % (Qtr) 106.01 -67.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.33 1.66
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.59 1.29
Cash Payout Ratio Cash Payout (Qtr) 0.13 0.07
Cash Ratio Cash Ratio (Qtr) 0.23 0.97
Current Ratio Curr Ratio (Qtr) 0.81 3.22
Debt to Equity Ratio Debt/Equity (Qtr) -3.36 1.06
Interest Cover Ratio Int Coverage (Qtr) 2.08 -430.42
Times Interest Earned Times Interest Earned (Qtr) 2.08 -430.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.90 17.62
EBIT Margin % EBIT Margin % (Qtr) 11.01 24.68
EBT Margin % EBT Margin % (Qtr) 5.73 18.38
Gross Margin % Gross Margin % (Qtr) 53.80 20.25
Net Profit Margin % Net Margin % (Qtr) 4.10 31.04