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Strength in Vista Segment Aids Cimpress (CMPR) Amid Cost Woes
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Cimpress plc (CMPR - Free Report) is poised to gain from increased orders and higher average order values. Strength across the company’s Vista, National Pen and Upload & Print segments is also aiding CMPR. Order growth, particularly from new customers, and higher average order values driven by both product mix and favorable pricing are supporting the Vista segment. An increase in the customer count also bodes well for the segment.
Significant growth in the e-commerce channel is driving the National Pen segment. In addition, the company’s investment in technology and product innovation augurs well for long-term growth.
Cimpress’ effective cost-control measures support its margin performance. The gross margin was up 100 basis points, year over year, in the first three months of fiscal 2024 (ended September 2023). Also, adjusted EBITDA margin grew 520 basis points, year over year, due to reduced operating expenses.
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 product line expanded to include a wide variety of offerings for customers' marketing needs. Also, the PrintBrothers' businesses continue to adopt technologies that are part of the company’s mass customization platform. Cimpress is also restructuring its business by narrowing the product development teams and combining the same that were working on similar activities earlier. This action may improve customer value and the efficiency of the business over the long term.
However, Cimpress is persistently bearing the brunt of input cost inflation. In the first three months of fiscal 2024, the cost of revenues increased 5.6% on a year-over-year basis due to the rising shipping costs. Escalation in costs, if not controlled, can severely affect margins and profitability in the quarters ahead.
Cimpress’ extensive geographic presence exposes its business to geopolitical risks and headwinds arising from unfavorable movements in foreign currencies. In the first three months of fiscal 2024, adverse movements in foreign currencies reduced the company’s adjusted EBITDA by $3.5 million year over year.
In the past year, this Zacks Rank #3 (Hold) company's shares have surged 203.8% compared with the industry’s 11% growth.
Image Source: Zacks Investment Research
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Strength in Vista Segment Aids Cimpress (CMPR) Amid Cost Woes
Cimpress plc (CMPR - Free Report) is poised to gain from increased orders and higher average order values. Strength across the company’s Vista, National Pen and Upload & Print segments is also aiding CMPR. Order growth, particularly from new customers, and higher average order values driven by both product mix and favorable pricing are supporting the Vista segment. An increase in the customer count also bodes well for the segment.
Significant growth in the e-commerce channel is driving the National Pen segment. In addition, the company’s investment in technology and product innovation augurs well for long-term growth.
Cimpress’ effective cost-control measures support its margin performance. The gross margin was up 100 basis points, year over year, in the first three months of fiscal 2024 (ended September 2023). Also, adjusted EBITDA margin grew 520 basis points, year over year, due to reduced operating expenses.
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 product line expanded to include a wide variety of offerings for customers' marketing needs. Also, the PrintBrothers' businesses continue to adopt technologies that are part of the company’s mass customization platform. Cimpress is also restructuring its business by narrowing the product development teams and combining the same that were working on similar activities earlier. This action may improve customer value and the efficiency of the business over the long term.
However, Cimpress is persistently bearing the brunt of input cost inflation. In the first three months of fiscal 2024, the cost of revenues increased 5.6% on a year-over-year basis due to the rising shipping costs. Escalation in costs, if not controlled, can severely affect margins and profitability in the quarters ahead.
Cimpress’ extensive geographic presence exposes its business to geopolitical risks and headwinds arising from unfavorable movements in foreign currencies. In the first three months of fiscal 2024, adverse movements in foreign currencies reduced the company’s adjusted EBITDA by $3.5 million year over year.
In the past year, this Zacks Rank #3 (Hold) company's shares have surged 203.8% compared with the industry’s 11% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies have been discussed below.
Flowserve Corporation (FLS - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 2.5%. The stock has risen 36.1% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 3.3% in the past 60 days. Shares of Applied Industrial have jumped 36.2% in the past year.
A. O. Smith Corporation (AOS - Free Report) currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the Zacks Consensus Estimate for A. O. Smith’s 2023 earnings has improved 4.7%. The stock has risen 41.7% in the past year.