Cimpress Stock Gains From Business Strength Despite Headwinds
Cimpress plc CMPR is witnessing solid momentum across its Vista, National Pen and Upload & Print segments. Significant growth in the e-commerce channels is driving the National Pen segment while increasing order rates is proving beneficial for the Upload & Print segment. The company’s focus on improving the customer experience and new product introductions are aiding its Vista segment.
In the fourth quarter of fiscal 2024, (ended June 30, 2024) the Vista segment’s revenues grew 8% year over year. In the same quarter, the Upload & Print segment’s revenues rose 6% year over year while the same for National Pen grew 1%.
The scale of Cimpress’ operation gives small business customers access to quality products and printing services, which would otherwise have been out of reach. The company has expanded its product line to include a wide variety of offerings for customers' marketing needs. Also, the PrintBrothers' businesses continue to adopt technologies that are part of the CMPR’s mass customization platform.
CMPR remains focused on cost-control measures that have been driving its margins and profitability. In the fiscal fourth quarter, its gross margin increased 100 basis points year over year. Also, the adjusted EBITDA margin was in line with the year-ago quarter’s level.
CMPR Stock’s Price Performance
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In the past year, this Zacks Rank #3 (Hold) company’s shares have gained 19.5% compared with the industry’s 18.2% growth.
However, the company has been witnessing the adverse impacts of the high costs and operating expenses. From fiscal 2020 to fiscal 2024, its cost of sales witnessed a 6.3% CAGR (Compounded Annual Growth Rate), while selling, general and administrative expenses witnessed a 2.4% CAGR.
In the fiscal fourth quarter, its cost of revenues increased 2.5% year over year due to rising production and shipping costs. General and administrative expenses rose 2.9% in the fourth quarter due to higher travel and training costs and consulting spending.
High debt levels also remain concerning for the company. Exiting fiscal 2024, its long-term debt was high at $1.6 billion. Considering its high debt profile, its cash and cash equivalents of $203.8 million does not seem impressive.
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Cimpress plc (CMPR) : Free Stock Analysis Report