Cimpress PLC (CMPR, Financial) experienced a significant decline in its stock price after the release of its Q1 2025 results. The stock dropped 9.36% to close at $69.01. This adjustment followed the company's reported earnings, which highlighted a net loss of $0.50 per share, contrasting sharply with analysts' expectations of $0.29 earnings per share.
Despite a promising 6% increase in revenue reaching $805 million, Cimpress's performance was weighed down by decreased operating profits in its Vista and PrintBrothers divisions. The negative earnings were further pressured by interest payments related to refinanced debt, and the company's free cash flows took a hit due to elevated product inventory levels compared to the previous year.
From a valuation standpoint, Cimpress exhibits a GF Value of $73.38, suggesting that the stock is currently fairly valued. The company's price-to-earnings (PE) ratio of 10.73 is close to its three-year low, highlighting an opportunity for value investors. Additionally, the Piotroski F-Score of 7 indicates a very healthy financial situation, while the Beneish M-Score of -2.95 suggests that the company is unlikely to be a manipulator.
However, investors should remain cautious due to several warning signs. The Altman Z-score of 2.72 places Cimpress in the grey area, implying some financial stress. Moreover, the company's operating margin has declined at an average rate of 6.3% per year over the past five years. This trend, coupled with insider selling activities, where 96,825 shares were sold with no insider buys in the last three months, raises concerns about investor confidence.
While Cimpress's consistent revenue growth and favorable valuation metrics present potential investment opportunities, the current financial stress indicators warrant careful consideration. Investors should monitor the company's ability to manage its debt and improve its operating margins in the upcoming quarters.
