It has been about a month since the last earnings report for Cimpress (CMPR). Shares have added about 2.5% 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 drivers.
Cimpress Q3 Earnings Miss Estimates, Revenues Beat
Cimpress reported mixed third-quarter fiscal 2021 results, wherein earnings missed the Zacks Consensus Estimate, but revenues beat the same.
The company reported an adjusted loss of $1.50 per share, wider than the Zacks Consensus Estimate of a loss of 53 cents by 183%. Moreover, the bottom line declined from the year-ago quarter’s earnings of 61 cents per share.
Top-Line Details
Total revenues in the fiscal third quarter were $578.9 million compared with $598 million in the year-ago quarter. However, the top line surpassed the consensus estimate of $527 million by 15.8%.
Segmental Information
The National Pen segment generated revenues of $62.2 million, down from $68.4 million in the prior-year quarter. Vistaprint — the largest revenue generating segment of the company — reported aggregate revenues of $327.5 million, up from $316.3 million in the year-ago quarter.
The Upload and Print segment’s revenues fell to $153.7 million from $177.8 million in the year-ago quarter. The segment consists of two subgroups — PrintBrothers and The Print Group. PrintBrothers’ revenues fell to $94 million from $109.5 million in the prior-year quarter. The Print Group generated revenues of $59.9 million, down from $68.5 million. Meanwhile, revenues from All Other Businesses increased to $44.1 million from $39.2 million.
Margin Details
In the quarter, Cimpress’ cost of revenues was $302 million, down 2.5% on a year-over-year basis. It represented 52.2% of total revenues. Total selling, general & administrative expenses were $216.9 million, up 11.9% on a year-over-year basis. It represented 37.5% of total revenues in the fiscal third quarter.
Gross profit declined 4% year over year to $276.8 million with margin at 47.8%, down 40 basis points. Net interest expenses surged 67.6% to $29 million.
Balance Sheet and Cash Flow
As of Mar 31, 2021, Cimpress had $36.4 million in cash and cash equivalents compared with $228.3 million at the end of year-ago quarter. Also, the company’s total debt (net of issuance costs) was $1,341.2 million, down from $1,671.6 million. In the fiscal third quarter, Cimpress refrained from buying back shares.
In first nine months of fiscal 2021, net cash provided by operating activities was $218.9 million compared with $284.1 million in the year-ago period.
Outlook
Due to uncertainties regarding the impact of the coronavirus outbreak on financial and operating results, the company has not provided earnings and revenue projections for the fourth quarter and fiscal 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 170.73% due to these changes.
VGM Scores
At this time, Cimpress has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. Notably, Cimpress has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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