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On Wednesday, Goldman Sachs adjusted its price target for Cricut , Inc. (NASDAQ:CRCT) shares, reducing it to $5.00 from the previous $5.25, while maintaining a Neutral rating on the stock. Currently trading at $5.07, InvestingPro analysis suggests the stock is slightly undervalued. The adjustment came following the company’s first-quarter earnings report for 2025.
Cricut’s management highlighted several key points in the earnings report. They noted that the company’s topline performance and management commentary indicated a stronger resilience than initially anticipated for the quarter. With a strong financial health score of 3.11 (rated "GREAT" by InvestingPro) and a healthy current ratio of 2.85, the company maintains robust operational stability. Despite acknowledging a range of potential outcomes with a slight downward bias due to rising uncertainties, Cricut has not observed any significant broad-based weakness in demand thus far.
The company also anticipates a decline in revenue for the first half of 2025, particularly within the accessories and materials segments, and pointed out unfavorable competitive dynamics in the market. Cricut’s profitability in the first quarter was bolstered by one-time items, but the management has cautioned that the previous full-year 2025 operating margin guidance should not be considered reliable anymore. This change is attributed to uncertainties related to tariffs. Nevertheless, the company plans to maintain positive operating income throughout each quarter of the year.
In addition to the financial outlook, Cricut announced shareholder return initiatives, including the repurchase of 2.1 million shares in the first quarter. The company has also approved a special dividend of $0.75 per share and confirmed the ongoing semi-annual dividend of $0.10 per share, both of which are set to be distributed in the third quarter. The total dividend yield now stands at 3.94%, supported by strong free cash flow yield of 23%. For deeper insights into Cricut’s financial health and more exclusive tips, check out the comprehensive Pro Research Report available on InvestingPro.
Goldman Sachs analyst stated, "We reiterate our Neutral rating and adjust our forward operating estimates for this earnings report and lower our 12-month PT from $5.25 to $5.00." The revised price target reflects the latest earnings report and the current economic factors influencing the company’s performance.
In other recent news, Cricut Inc. reported strong financial results for the first quarter of 2025, exceeding Wall Street’s expectations. The company achieved an earnings per share (EPS) of $0.11, surpassing the projected $0.09, and reported revenue of $162.6 million, slightly above the anticipated $161.96 million. Despite a 3% year-over-year decline in total revenue, Cricut maintained a robust gross margin of 60.5%, up from 54.7% the previous year, indicating improved cost management. The company’s platform revenue increased by 2%, although product revenue saw a 7% decline. Additionally, Cricut announced a special dividend of $0.75 per share and a recurring semiannual dividend of $0.10 per share, alongside a replenished stock repurchase program of up to $50 million. Analysts from Morgan Stanley (NYSE:MS) and Citigroup (NYSE:C) noted Cricut’s strategic supply chain adjustments and its focus on enhancing user engagement and acquisition. Cricut’s CEO and CFO emphasized the company’s ongoing commitment to profitability and cash flow generation amid tariff uncertainties.
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