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Why Is Cimpress (CMPR) Up 21.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Cimpress (CMPR - Free Report) . Shares have added about 21.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Cimpress due for a pullback? 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 catalysts.

Cimpress Q2 Earnings & Revenues Miss Estimates

Cimpress reported lackluster second-quarter fiscal 2023 results, wherein earnings missed the Zacks Consensus Estimate by 134.8% and sales missed the same by 6.2%.

CMPR incurred an adjusted loss of 46 cents per share. The Zacks Consensus Estimate was pegged at earnings of $1.32. Cimpress reported an EPS of $2.08 per share in the year-ago quarter.

Top-Line Details

Total revenues in the fiscal second quarter were $845.2 million, reflecting a decrease of 0.5% from $849.7 million in the year-ago quarter. The organic constant-currency revenue growth was 5%, driven by growth across all businesses. The top line missed the consensus estimate of $901 million.

Segmental Information

The National Pen segment generated revenues of $120.6 million, down from $124.7 million in the prior-year quarter. This compares with the Zacks Consensus Estimate of $145 million. Vistaprint — the largest revenue-generating segment — reported aggregate revenues of $437.7 million, down from $448.1 million in the year-ago quarter. This compares with the Zacks Consensus Estimate of $479 million.

The Upload and Print segment’s revenues increased to $237.9 million from $227.8 million in the year-ago quarter. The segment consists of two subgroups, namely PrintBrothers and The Print Group. PrintBrothers’ revenues increased to $148.6 million from $137.7 million. The Print Group generated revenues of $89.3 million, down from $90,1 million. Revenues from All Other Businesses increased to $60 million from $57.7 million. This compares with the Zacks Consensus Estimate of $62 million.

Margin Details

In the quarter, Cimpress' cost of revenues was $455.4 million, up 7.4% on a year-over-year basis. The metric represented 53.9% of total revenues. Total selling, general & administrative expenses were $254.9 million, marginally down from the year-ago quarter. The same represented 30.2% of total revenues in the quarter.

Gross profit increased 8.5% year over year to $390 million. The margin was 46.1%, down 400 basis points due to inflationary pressure on input costs and product mix shifts in Vista. Net interest expenses rose 12.6% to $28.6 million.

Balance Sheet and Cash Flow

As of Dec 31, 2022, Cimpress had $111.3 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 $1,689.3 million. In the fiscal second quarter, Cimpress refrained from buying back shares.

In the first six months of fiscal 2023, net cash provided by operating activities was $55.9 million compared with $179.9 million cash provided a year ago.

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 -61.79% due to these changes.

VGM Scores

Currently, Cimpress has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 these revisions 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.


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