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Cimpress plc (CMPR - Free Report) is benefiting from strength across its Vista, National Pen and Upload & Print segments. The company’s investment in technology and product innovation, along with increased orders and higher average order values, bodes well. Improvements in customer experience and new product introductions are aiding its Vista segment. Also, an increase in the customer count, along with the continued increase in revenue per customer, bodes well for the segment.
Significant growth in the e-commerce channels is driving the National Pen segment. Increasing order rates are expected to benefit the Upload & Print segment’s revenues in the near term.
Cimpress’ effective cost-control measures are supporting its margin performance. The gross margin was up 100 basis points year over year in the fourth quarter of fiscal 2024 (ended June 2024). Also, the adjusted EBITDA margin was in line with the year-ago quarter’s level.
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 is likely to improve customer value and the efficiency of the business over the long term.
In the past year, this Zacks Rank #3 (Hold) company’s shares gained 40.4% compared with the industry’s 14.8% growth.
Image Source: Zacks Investment Research
Over time, Cimpress has been dealing with the adverse impacts of the high cost of sales. From fiscal 2020 to fiscal 2024, the CAGR for the company's cost of sales was 6.3%, and that for selling, general and administrative expenses was 2.4%. In the fourth quarter of fiscal 2024, the cost of revenues increased 2.5% on a year-over-year basis due to rising production and shipping costs.
In fiscal 2024, the company’s cost of revenues increased 3.3% due to rising costs for product substrates like paper, production materials like aluminum plates, freight and shipping charges and energy costs. General and administrative expenses rose 2.9% year over year in the fourth quarter due to higher travel and training costs and consulting spending. The company is persistently bearing the brunt of input cost inflation. Escalation in costs, if not controlled, can severely affect margins and profitability in the quarters ahead.
High debt levels are likely to weigh on Cimpress. In the last five fiscal years (2020-2024), the company’s long-term debt witnessed a CAGR of 2.4%. In fiscal 2024, the metric was high at $1.6 billion, stable on a sequential basis. Considering its high debt profile, its cash and cash equivalents (in fiscal 2024) of $203.8 million do not seem impressive.
HRB delivered a trailing four-quarter average earnings surprise of 10.8%. In the past 60 days, the Zacks Consensus Estimate for H&R Block’s fiscal 2025 earnings has increased 6.7%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.1%.
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Cimpress Stock Exhibits Strong Prospects Despite Headwinds
Cimpress plc (CMPR - Free Report) is benefiting from strength across its Vista, National Pen and Upload & Print segments. The company’s investment in technology and product innovation, along with increased orders and higher average order values, bodes well. Improvements in customer experience and new product introductions are aiding its Vista segment. Also, an increase in the customer count, along with the continued increase in revenue per customer, bodes well for the segment.
Significant growth in the e-commerce channels is driving the National Pen segment. Increasing order rates are expected to benefit the Upload & Print segment’s revenues in the near term.
Cimpress’ effective cost-control measures are supporting its margin performance. The gross margin was up 100 basis points year over year in the fourth quarter of fiscal 2024 (ended June 2024). Also, the adjusted EBITDA margin was in line with the year-ago quarter’s level.
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 is likely to improve customer value and the efficiency of the business over the long term.
In the past year, this Zacks Rank #3 (Hold) company’s shares gained 40.4% compared with the industry’s 14.8% growth.
Image Source: Zacks Investment Research
Over time, Cimpress has been dealing with the adverse impacts of the high cost of sales. From fiscal 2020 to fiscal 2024, the CAGR for the company's cost of sales was 6.3%, and that for selling, general and administrative expenses was 2.4%. In the fourth quarter of fiscal 2024, the cost of revenues increased 2.5% on a year-over-year basis due to rising production and shipping costs.
In fiscal 2024, the company’s cost of revenues increased 3.3% due to rising costs for product substrates like paper, production materials like aluminum plates, freight and shipping charges and energy costs. General and administrative expenses rose 2.9% year over year in the fourth quarter due to higher travel and training costs and consulting spending. The company is persistently bearing the brunt of input cost inflation. Escalation in costs, if not controlled, can severely affect margins and profitability in the quarters ahead.
High debt levels are likely to weigh on Cimpress. In the last five fiscal years (2020-2024), the company’s long-term debt witnessed a CAGR of 2.4%. In fiscal 2024, the metric was high at $1.6 billion, stable on a sequential basis. Considering its high debt profile, its cash and cash equivalents (in fiscal 2024) of $203.8 million do not seem impressive.
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H&R Block, Inc. (HRB - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HRB delivered a trailing four-quarter average earnings surprise of 10.8%. In the past 60 days, the Zacks Consensus Estimate for H&R Block’s fiscal 2025 earnings has increased 6.7%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.1%.