Pitney Bowes PBI is currently trading at a low price-to-earnings (P/E) multiple, far below the broader tech sector and S&P 500 averages. PBI’s forward 12-month P/E ratio is 0.87X, significantly lower than the Zacks Computer and Technology sector’s average of 5.75 and the S&P 500’s average of 4.89.

Pitney Bowes’ Forward 12-Month P/S Ratio

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Pitney Bowes shares have skyrocketed 122.1% in the past year, outperforming the Zacks Computer and Technology sector and the S&P 500 index’s returns of 5.1% and 8.8%, respectively. This outstanding surge raises the question: is  the stock still worth buying?

PBI’s One-Year Price Performance

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Strong Customer Base & Partners Drive Pitney Bowes’ Growth

PBI’s broad customer base, which includes more than 90% of Fortune 500 companies, is a testament to its market leadership. Its collaboration with industry giants, such as Amazon AMZN, eBay EBAY, Shopify and Salesforce CRM, strengthens its position in the global logistics and technology space.

For instance, PBI provides cross-border e-commerce logistics services to eBay in the U.S. and U.K. markets. Its longstanding partnership with Amazon Web Services (“AWS”) and membership in the AWS Solution Provider Network highlights its ability to integrate seamlessly with cutting-edge technologies.

PBI and Salesforce are connected through the latter’s Shipping API Partner Program. These collaborations not only diversify its revenue streams but also position it for long-term growth.

PBI Divests GEC Business to Accelerate Growth

Pitney Bowes has long grappled with the underperformance of its Global Ecommerce (“GEC”) segment. PBI had made significant investments, including the acquisitions of Borderfree in 2015 and Newgistics in 2017, to bolster the GEC business. The segment initially gained traction during the COVID-19 pandemic. However, after the pandemic, declining package volumes and aggressive discounting by competitors dragged down its profitability.

Recognizing GEC as a liability, Pitney Bowes has divested this segment with one-time exit costs of $165 million, of which $120 million has already been paid in 2024. This strategic exit allows PBI to focus on its higher-margin businesses, bolstering profitability and enabling a leaner operational structure.

Pitney Bowes Demonstrates Robust Financial Performance

PBI’s efforts to address its substantial long-term debt and improve liquidity are already bearing fruit. By repatriating $117 million from overseas operations, the company has amassed more than $100 million in excess cash, which will support debt reduction and enhance its financial flexibility.

Pitney Bowes is strongly focusing on debt reduction and financial strengthening. On the fourth-quarter earnings call, PBI reported that it paid off $275 million Oaktree notes with internally generated cash. The company also reduced offshore cash holdings by $90 million, improving cash availability.

PBI is demonstrating solid financial recovery as well. The company has witnessed strong improvement in non-GAAP operating profit and margin throughout 2024. In the fourth quarter of 2024, adjusted operating profit grew 33% year over year to $114 million, whereas the margin expanded 580 basis points to 22.2%

Analysts are optimistic about Pitney Bowes’ earnings growth potential. The Zacks Consensus Estimate for 2025 earnings has moved up by 13 cents to $1.21 in the past 60 days, indicating 47.6% year-over-year growth. The stock has surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 96.64%.

Pitney Bowes Inc. Price, Consensus and EPS Surprise

Pitney Bowes Inc. price-consensus-eps-surprise-chart | Pitney Bowes Inc. Quote

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Conclusion: Buy PBI Stock Now

Pitney Bowes is driving its growth through realignment and cost-cutting initiatives. The divestiture of the GEC segment, coupled with financial discipline and robust partnerships, positions the company for long-term profitability.

Given its strong financial recovery, undervalued stock price and promising growth outlook, PBI offers a compelling investment opportunity. Investors looking to capitalize on this transformation should consider adding this Zacks Rank #1 (Strong Buy) stock to their portfolios right now. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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