Over the past week, Cricut Inc (CRCT, Financial), a prominent player in the hardware industry, has experienced a notable decline in its stock price, dropping by 12.81% to a current rate of $6.30. Despite this recent dip, the company has seen an impressive 26.51% increase over the past three months. Currently, the market capitalization stands at $1.37 billion. According to GuruFocus, the GF Value of the stock is $7.71, suggesting that it is modestly undervalued. This is a shift from three months ago when the stock was considered significantly undervalued at a GF Value of $9.84.
Introduction to Cricut Inc
Cricut Inc designs and builds a creativity platform that enables users to turn ideas into professional-looking handmade goods. With its connected machines, design apps and accessories, and materials, the users create everything from personalized birthday cards, mugs, and T-shirts to large-scale interior decorations. It derives revenues from three segments including the Connected machines engaged in the sale of its connected machine hardware and related essential software, the Subscriptions segment provides monthly and annual subscription fees, and the Accessories and Materials segment provides craft, DIY, home decor products and heat presses including the Cricut EasyPress, Cricut Mug Press, and Cricut Autopress.
Assessing Profitability
Cricut Inc boasts a high Profitability Rank of 8/10, indicating robust profitability metrics. The company's Operating Margin is 11.27%, which is higher than 80.67% of its peers in the industry. Additionally, its Return on Equity (ROE) and Return on Assets (ROA) stand at 11.50% and 8.15% respectively, surpassing the majority of its competitors. The Return on Invested Capital (ROIC) is particularly impressive at 16.34%, ranking higher than 86.74% of companies in the same sector. Over the past decade, Cricut has maintained profitability for six years, showcasing its financial stability.
Growth Metrics
The company's Growth Rank is currently at 5/10. Over the past three years, Cricut has seen a revenue decline per share of 7.00%, which, while not ideal, still fares better than 23.16% of its industry counterparts. However, its five-year revenue growth rate per share stands at an impressive 19.50%, outperforming 91.27% of competitors. The EPS growth rates have been mixed, with a three-year decline of 29.90% but a five-year growth rate of 4.90%. These figures highlight the challenges and successes in Cricut's recent financial performance.
Investor Holdings
Notable investors in Cricut Inc include Jim Simons, who holds 368,142 shares, representing 0.17% of shares. Following him are Joel Greenblatt (Trades, Portfolio) and Chuck Royce (Trades, Portfolio), holding 33,412 and 30,470 shares respectively. These holdings reflect a cautious but significant interest from institutional investors.
Competitive Landscape
When compared to its competitors, Cricut Inc holds a unique position in the market. IonQ Inc (IONQ, Financial) with a market cap of $1.76 billion, Corsair Gaming Inc (CRSR, Financial) valued at $1.21 billion, and Stratasys Ltd (SSYS, Financial) with a market cap of $646.587 million are among its closest competitors. Each company brings different strengths to the table, making the hardware sector highly competitive.
Conclusion
In conclusion, Cricut Inc's recent stock performance reflects a volatile yet promising market presence. Despite recent declines, its three-month performance and underlying financial metrics suggest potential for recovery and growth. The company's strong profitability and competitive edge in innovation and product diversity make it a noteworthy contender in the hardware industry. Investors should keep an eye on market trends and consider the long-term growth prospects and challenges that Cricut faces.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
