Pitney Bowes Inc. (PBI): A Bull Case Theory

We came across a bullish thesis on Pitney Bowes Inc. (PBI) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on PBI. Pitney Bowes Inc. (PBI)’s share was trading at $9.52 as of March 7^th. PBI’s trailing and forward P/E were 17 and 7.87 respectively according to Yahoo Finance.

Pitney Bowes (PBI) has defied the broader market trend, rallying on its February earnings announcement. While the company carries risks due to its integration with the U.S. Postal Service and uncertainty surrounding potential regulatory changes under figures like Trump and Musk, Hestia Capital’s activist involvement is proving beneficial. Management has laid out an ambitious roadmap, projecting nearly $500 million in EBITDA for 2025—double the expected 2024 figure. This growth comes after a challenging year marked by restructuring charges totaling $86 million from exiting the Global Ecommerce business. Adjusting for these one-time expenses, free cash flow for 2024 would have reached $290 million, an impressive figure for a company with a $1.5 billion market cap before earnings, which has since risen to $1.8 billion. In a further show of confidence, the board authorized a $150 million share repurchase program, signaling management’s belief in PBI’s undervaluation.

Despite these strengths, the company remains in a complex position. The logistics sector is set to benefit from secular tailwinds, and PBI, under activist control, is positioned to capitalize on this shift. However, the potential deregulation or privatization of the USPS introduces a layer of uncertainty. A privatization move, while disruptive, could ultimately be beneficial for PBI, but the specifics will determine the outcome. For now, the lack of clarity on these details makes it difficult to gauge the full impact. With its improving financials, activist-driven reforms, and the potential for significant upside, PBI remains a compelling yet cautious investment.

Pitney Bowes Inc. (PBI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held PBI at the end of the fourth quarter which was 28 in the previous quarter. While we acknowledge the risk and potential of PBI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PBI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.