Pitney Bowes PBI shares have jumped 46.6% in the past month, outperforming the Zacks Computer and Technology sector and the broader S&P 500’s return of 1.8% and 1.7%, respectively. Pitney Bowes’ strong rally over the past month highlights the confidence that investors have in PBI’s strong foothold in the global logistics and technology space.

PBI Grows on the Back of Strong Customer Base and Partners

Pitney Bowes’ 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, further strengthens its position in the global logistics and technology space.

For instance, Pitney Bowes 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.

One-month Price Return Performance

Image Source: Zacks Investment Research

PBI Accelerates Growth by Divesting Its GEC Business

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 a one-time exit cost 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.

PBI Demonstrates Robust Financial Performance

Pitney Bowes’ 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, while margin expanded 580 basis points to 22.2%.

Analysts are also optimistic about Pitney Bowes’ earnings growth potential. The Zacks Consensus Estimate for 2025 earnings has moved up by 9 cents to $1.21 in the past seven days, indicating 47.6% year-over-year growth. The stock has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 96.64%.

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

Pitney Bowes’ Attractive Valuation Signals Uptrend

Despite the stellar performance, Pitney Bowes still trades at a discounted valuation. Pitney Bowes’ forward 12-month P/E ratio sits at 8.70X, significantly lower than the Zacks Computer and Technology sector’s average of 26.19X and the S&P 500’s average of 22.66X.

PBI 12-month P/E Ratio

Image Source: Zacks Investment Research

Additionally, PBI shares are trading above the 50-day moving averages, indicating a bullish trend.

Image Source: Zacks Investment Research

Conclusion: Buy PBI Stock Now

Pitney Bowes is at an inflection point, with its strategic realignment and cost-cutting initiatives paving the way for sustainable growth. 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 the stock to their portfolios now. PBI currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Salesforce Inc. (CRM) : Free Stock Analysis Report

eBay Inc. (EBAY) : Free Stock Analysis Report

Pitney Bowes Inc. (PBI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research