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Why Is Cimpress (CMPR) Down 6.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Cimpress (CMPR). Shares have lost about 6.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cimpress due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Cimpress Q4 Earnings Miss Estimates, Decline Y/Y

Cimpress reported fourth-quarter fiscal 2020 results, with earnings missing the Zacks Consensus Estimate but revenues beating the same.

The company’s adjusted loss were $1.62 per share, wider than the Zacks Consensus Estimate of a loss of $1.24. Moreover, the bottom line deteriorated from the year-ago quarter’s adjusted earnings of $1.28 per share.

Top-Line Details

Total revenues in the fiscal fourth quarter were $429.1 million compared with $675 million in the year-ago quarter. However, the top line surpassed the consensus estimate of $421 million.

Segmental Information

The National Pen segment generated revenues of $33 million, down from $69.8 million in the prior-year quarter. Vistaprint — the largest revenue-generating segment of the company — reported aggregate revenues of $244.5 million, down from $360.4 million in the year-ago quarter.

The Upload and Print segment’s revenues fell to $118.9 million from $204.8 million in the year-ago quarter. The segment consists of two subgroups —  PrintBrothers and The Print Group. PrintBrothers’ revenues fell to $72.5 million from $117 million in the prior-year quarter. The Print Group generated revenues of $46.7 million, down from $88.1 million reported in the year-ago quarter. Meanwhile, revenues from All Other Businesses increased to $42.5 million from $42.2 million in the year-ago quarter.

Margin Details

In the quarter, Cimpress' cost of revenues was $219.6 million, down 36.3% on a year-over-year basis. It contributed 51.2% to total revenues. Total selling, general & administrative expenses declined 31.5% year over year to $133.4 million. It contributed 31.1% of revenues in the fiscal fourth quarter.

Gross profit declined 36.5% year over year to $209.5 million, with margin at 48.8%, down 10 basis points year over year. Net interest expenses surged 75.9% year over year to $27.8 million.

Balance Sheet and Cash Flow

As of Jun 30, 2020, Cimpress had $45 million in cash and cash equivalents compared with $35.3 million in the prior-year quarter. Also, the company’s long-term debt was $1,415.7 million, marking an increase of 50.2% on a year over year basis.

In the fiscal fourth quarter, Cimpress refrained from buying back any shares. However, in fiscal 2020, Cimpress repurchased 5,002,018 shares for $627 million.

For fiscal 2020, net cash provided by operating activities was $338.4 million compared with $331.1 million in the previous fiscal year.

Order Trends

The company mentioned that its consolidated bookings recorded a decline of 19% on a year-over-year basis in June. For July, the company anticipates its consolidated bookings to decline roughly 5% year-over-year.

Outlook

The company has not provided earnings and revenue projections for the first quarter and fiscal 2021.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 140.34% due to these changes.

VGM Scores

At this time, Cimpress has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Cimpress has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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