Q: Can I get your thoughts on this company
5i Research Answer:
DFY’s shares have declined a bit year-to-date down 4.3%. Valuation is attractive at 14.2x forward earnings with growth outlook for revenue and EPS looking very strong in 2024. Revenue has continued to grow this year although this has slowed in the recent quarter with growth of just 3.7%. Margins have declined in Q3, but EPS and revenue have beat estimates in two previous quarters. DFY has a net cash balance of $188.1M. There is a low forward dividend yield of 1.58%. DFY definitely faced cost pressures which may have been driven by large catastrophe losses in Q3 which hurt its profitability. Still, the growth outlook looks positive in 2024, and valuation is attractive despite the slight slowdown in Q3. We would be comfortable owning it.