Pitney Bowes PBI shares have lost 14.5% in the past month, underperforming the Zacks Computer and Technology sector’s decline of 12.2%. The recent decline in PBI’s stock price stems from broader market weakness.

A widespread sell-off in tech stocks, triggered by fears of rising trade tensions and slowing economic growth concerns, has put pressure on the entire sector, including Pitney Bowes. However, considering PBI’s strong fundamentals, investors’ concerns seem overblown.

Pitney Bowes One Month Price Performance

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Pitney Bowes Leverages Robust Customer Base for 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 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. Pitney Bowes transformed its role from just being a partner with eBay’s Global Shipping Program to eBay International Shipping service as a logistic partner.

Its longstanding partnership with Amazon Web Services and membership in the Amazon Web Services’ Solution Provider Network highlight its ability to integrate seamlessly with cutting-edge technologies.

PBI and Salesforce are connected through the latter’s Shipping API Partner Program. Moreover, Pitney Bowes has leveraged Salesforce’s cloud platform and mapping technology to develop a solution for underwriters, so that they can take a deeper grasp of risk factors.

These collaborations not only diversify its revenue streams but also position it for long-term growth. The Zacks Consensus Estimate for Pitney Bowes’ 2025 earnings is pegged at $1.21 per share, indicating 47.6% year-over-year 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.

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

Conclusion: Buy Pitney Bowes Now

Pitney Bowes is growing 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. Considering all these factors, we suggest that investors should buy this Zacks Rank #1 (Strong Buy) at present. 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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