A month has gone by since the last earnings report for Cimpress (CMPR). Shares have lost about 6.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Cimpress Q2 Earnings Beat Estimates, Revenues Miss
Cimpress reported mixed second-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
The company reported adjusted earnings of $2.08 per share, beating the Zacks Consensus Estimate of an earnings of $1.58 by 31.7%. The bottom line improved from the year-ago quarter’s earnings of $1.22 per share.
Top-Line Details
Total revenues in the fiscal second quarter were $849.7 million, reflecting an increase of 9% from $780.9 million in the year-ago quarter. The top line missed the consensus estimate of $852 million by 0.3%.
Segmental Information
The National Pen segment generated revenues of $124.7 million, up from $114.7 million in the prior-year quarter. Vistaprint — the largest revenue-generating segment of the company — reported aggregate revenues of $448.1 million, up from $431.1 million in the year-ago quarter.
The Upload and Print segment’s revenues increased to $227.8 million from $198 million in the year-ago quarter. The segment consists of two subgroups — PrintBrothers and The Print Group. PrintBrothers’ revenues increased to $137.7 million from $121.8 million in the prior-year quarter. The Print Group generated revenues of $90.1 million, up from $76.2 million. Revenues from All Other Businesses increased to $57.7 million from $55.4 million.
Margin Details
In the quarter, Cimpress' cost of revenues was $423.9 million, up 11.3% on a year-over-year basis. It represented 49.9% of total revenues. Total selling, general & administrative expenses were $255.3 million, up 13.3%. It represented 30% of total revenues in the fiscal second quarter.
Gross profit increased 6.4% year over year to $425.8 million with a margin of 50.1%, down 110 basis points. Net interest expenses fell 15.6% to $25.4 million.
Balance Sheet and Cash Flow
As of Dec 31, 2021, Cimpress had $231.2 million in cash and cash equivalents compared with $193.2 million at the end of the previous quarter. Also, the company’s long-term debt was $1,707.1 million, down from $1,718.3 million sequentially. In the fiscal second quarter, Cimpress refrained from buying back shares.
In the first six months of fiscal 2022, net cash provided by operating activities was $179.9 million compared with $256.2 million a year ago.
Outlook
The company is likely to benefit from end-market recovery in the quarters ahead. However, pandemic-related restrictions in some end markets might affect its performance. It remains focused on its organic growth investment in fiscal 2022.
For fiscal 2022, Cimpress is likely to incur capital expenditures, primarily for investment in product innovation and launches.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -108.86% due to these changes.
VGM Scores
At this time, Cimpress has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
