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Investing.com - JPMorgan downgraded CompoSecure Inc. (NASDAQ:CMPO) from Neutral to Underweight on Wednesday, setting a price target of $16.00. According to InvestingPro data, analyst targets for CMPO currently range from $16 to $23, with the stock showing an overall Financial Health score of "GOOD."
The downgrade comes after CompoSecure shares rallied approximately 25% following its second-quarter earnings report, which featured a return to double-digit growth of 10% and a gross profit margin beat. The stock has demonstrated remarkable momentum, posting a 89.5% return over the past year and nearly 30% gain in the last six months.
JPMorgan cited concerns about choppy growth over several quarters and limited visibility into the company’s back-half loaded full-year guidance as key factors in the rating change.
The firm noted that CompoSecure shares currently trade at 11x next-twelve-months adjusted EBITDA, which is only about a one-turn discount to all-time highs, suggesting the stock is "priced to perfection."
JPMorgan’s $16 price target applies a 9.0x target EV/EBITDA multiple to 2027 estimates, consistent with CompoSecure’s trailing twelve-month average multiple, while also highlighting that 2026 and 2027 Street adjusted EBITDA estimates have declined approximately 5% and 10% respectively since August 2024. Despite these concerns, four analysts have recently revised their earnings estimates upward for the upcoming period.
In other recent news, CompoSecure Inc. reported its second-quarter earnings for 2025, showing mixed results. The company experienced a significant shortfall in earnings per share (EPS), posting -$0.07 compared to the anticipated $0.21, marking a surprise of -133.33%. However, CompoSecure exceeded revenue expectations, reporting $119.6 million against a forecast of $110.62 million, an 8.11% surprise. These figures highlight a divergence between the company’s earnings and revenue performance. The revenue beat suggests robust sales or business activity during the quarter. Despite the EPS miss, the company’s positive revenue performance remains a focal point for investors. This development could influence future assessments of the company’s financial health.
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