Over the past six months, Pitney Bowes’s stock price fell to $10.47. Shareholders have lost 8.2% of their capital, which is disappointing considering the S&P 500 has climbed by 3%. This may have investors wondering how to approach the situation.

Is now the time to buy Pitney Bowes, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Pitney Bowes Not Exciting?

Even though the stock has become cheaper, we're cautious about Pitney Bowes. Here are two reasons why PBI doesn't excite us and a stock we'd rather own.

1. Revenue Spiraling Downwards

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Pitney Bowes’s demand was weak and its revenue declined by 11.8% per year. This wasn’t a great result and signals it’s a lower quality business.

2. Revenue Projections Show Stormy Skies Ahead

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Pitney Bowes’s revenue to drop by 3.9%. Although this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

Final Judgment

Pitney Bowes isn’t a terrible business, but it doesn’t pass our bar. Following the recent decline, the stock trades at 7.2× forward P/E (or $10.47 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We're fairly confident there are better stocks to buy right now. We’d recommend looking at one of Charlie Munger’s all-time favorite businesses.

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