Why Is Cimpress (CMPR) Down 8.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Cimpress (CMPR). Shares have lost about 8.3% 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 & Revenues Beat Estimates
Cimpress reported fourth-quarter fiscal 2023 (ended Jun 30, 2023) adjusted earnings (excluding 1 cent from non-recurring items) of $1.08 per share, which surpassed the Zacks Consensus Estimate of adjusted earnings of 21 cents per share. Cimpress incurred a loss of $1.17 per share in the year-ago quarter.
Top-Line Details
Total revenues in the fiscal fourth quarter were $788.8 million, reflecting an increase of 9.1% from $722.8 million in the year-ago quarter. The organic constant-currency revenue growth was also 9.1%, driven by growth across all businesses. The top line beat the Zack Consensus Estimate of $723 million.
Segmental Information
The National Pen segment generated revenues of $82.9 million, up from $75.6 million in the prior-year quarter. Vista — the largest revenue-generating segment — reported aggregate revenues of $410.1 million, up from $368.1 million in the year-ago quarter.
The Upload and Print segment’s revenues increased to $252.9 million from $235.2 million in the year-ago quarter. The segment consists of two subgroups, namely PrintBrothers and The Print Group. In the fiscal fourth quarter, PrintBrothers’ revenues increased to $157.6 million from $143.9 million reported in the year-ago period.
In the fiscal fourth quarter, the Print Group generated revenues of $95.3 million, up from $91.3 million reported in the year ago quarter. Revenues from All Other Businesses increased to $52.6 million from $53.6 million in the quarter.
Margin Details
In the quarter, Cimpress' cost of revenues was $412.6 million, up 7.9% on a year-over-year basis. Marketing and selling expenses totaled $180.7 million, down 14.5% year over year. Total general & administrative expenses were $52.8 million, down from $53.2 million reported in the year-ago quarter.
Gross profit increased 10.6% year over year to $376 million. The margin was 47.7%, up 60 basis points. Net interest expenses rose 19.7% to $28.9 million.
Balance Sheet and Cash Flow
As of Jun 30, 2023, Cimpress had $130.3 million of cash and cash equivalents, compared with $277.1 million at the end of the fourth quarter of fiscal 2022. Also, CMPR’s total debt (net of issuance costs) was $1,481 million.
In fiscal 2023, net cash provided by operating activities was $130.3 million, compared with $219.5 million cash provided a year ago.
Outlook
For fiscal 2024, the company expects consolidated reported revenue growth (assuming recent currency rates) of at least 8% and organic constant-currency revenue growth of at least 6%.
CMPR predicts operating income to be at least $205 million for the fiscal year and adjusted EBITDA to be least $420 million. The company also expects conversion of adjusted EBITDA to adjusted free cash flow to be approximately 40% for fiscal 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -877.78% due to these changes.
VGM Scores
At this time, Cimpress has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Cimpress has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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
Cimpress plc (CMPR) : Free Stock Analysis Report
