Why the Visa Direct collaboration matters for Deluxe

Deluxe (DLX) is in focus after announcing a collaboration with Visa to integrate Visa Direct into its payments platform, introducing dlxFastFunds as a near real time funding option for business clients.

The new service is aimed at helping companies shorten typical settlement delays, with the goal of improving day to day cash flow management for needs such as inventory, payroll, or reinvestment decisions.

Investors appear to be reacting positively to the Visa Direct news, with a 1 day share price return of 1.51% and a 90 day share price return of 28.96%. The 1 year total shareholder return of 18.16% suggests momentum has been building over a longer stretch.

If this kind of payments story has your attention, it can be useful to see what else is gaining traction, starting with fast growing stocks with high insider ownership.

With Deluxe trading at US$23.47, sitting at about a 22% discount to analyst targets and a sizeable modelled intrinsic discount, the real question for you is whether this signals an opportunity or whether the market already reflects expectations for future growth.

Most Popular Narrative: 18.1% Undervalued

Against the last close of US$23.47, the most followed narrative points to a fair value near US$28.67, suggesting a meaningful valuation gap to unpack.

Ongoing shift to electronic and cloud-based B2B payments offers Deluxe scalable long-term growth via its Digital Payment Network and recent bolt-on acquisition (Check Match), positioning the company to benefit as physical check usage declines and digital payment volumes increase, supporting future recurring revenue streams and higher gross margins.

Curious what earnings profile and margin path need to line up for that gap to make sense, especially with only modest revenue expansion assumed and a specific future P/E in mind.

Result: Fair Value of $28.67 (UNDERVALUED)

However, this hinges on newer payment and data services offsetting pressure in print, and on competition from fintech and SaaS players not eroding margins faster than expected.

Build Your Own Deluxe Narrative

If you see the numbers differently or want to stress test your own assumptions, you can build a fresh Deluxe story in just a few minutes, starting with Do it your way.

A great starting point for your Deluxe research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If you stop here, you risk missing companies that better fit your goals, so keep pushing your research and let data driven shortlists do some of the heavy lifting.

• Spot value candidates early by checking out these 882 undervalued stocks based on cash flows that may not yet be on everyone’s radar but already show up cheaply on cash flow metrics.
• Tap into fast moving themes by reviewing these 28 AI penny stocks where smaller names are tying their growth stories to artificial intelligence.
• Target higher income potential with these 12 dividend stocks with yields > 3%, focusing on companies offering yields above 3% that might help support a more dependable return profile.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.