Cadre Holdings stock target cut by Roth, maintains Buy rating

Roth/MKM has adjusted the price target for Cadre Holdings Inc. (NYSE: CDRE), decreasing it to $39.00 from the previous $43.00. Despite the reduction, the firm continues to recommend a Buy rating on the stock.

Cadre Holdings reported a strong second quarter, with a 19% year-over-year growth, which was supported by a 5% organic growth, aligning with the upper end of the management's targeted 3-5% range. The performance was further bolstered by contributions from the recent acquisitions of ICOR and Alpha.

The company's adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also reflected strength, benefitting from effective operational expense leverage.

Following these results, Cadre Holdings' management has revised its revenue outlook upward for the year 2024. However, the adjusted EBITDA forecast remains unchanged. This decision comes in the wake of a cyber attack on July 15, which is expected to shift some revenue from the third quarter to the fourth quarter, leading to a heavier weighting in the latter part of the year for both revenue and adjusted EBITDA.

Cadre Holdings reported a strong financial performance for Q2 2024, exhibiting significant growth in net sales and net income year-over-year. The company also noted an improvement in adjusted EBITDA margins and maintains an optimistic financial outlook.

Despite a cyber incident affecting gross margins, Cadre anticipates a robust final quarter due to a backlog of delayed orders. The firm is actively pursuing mergers and acquisitions to enhance its market presence, specifically in the law enforcement, military, and nuclear safety sectors.

Cadre provided guidance for adjusted EBITDA to be between $103 million and $109 million and capital expenditures between $7 million and $9 million. Despite the cyber incident, the company reported no loss of business, attributing a shift in sales from Q3 to Q4.

InvestingPro Insights

As Cadre Holdings Inc. (NYSE: CDRE) navigates through a period of growth and challenges, real-time data from InvestingPro provides a deeper financial perspective. The company's market capitalization stands at approximately $1.38 billion, reflecting its scale in the marketplace. With a Price/Earnings (P/E) ratio of 32.91, Cadre Holdings is trading at a high earnings multiple, which is a point of interest for investors gauging the stock's value against its current earnings.

InvestingPro Tips indicate that analysts have revised their earnings upwards for the upcoming period, suggesting a positive outlook on the company's profitability. Additionally, the company's liquid assets exceed short-term obligations, which may reassure investors of Cadre's financial health in meeting immediate liabilities. It's notable that while Cadre is trading at a high P/E ratio relative to near-term earnings growth, the company has been profitable over the last twelve months and has delivered a strong return over the last five years.

For investors seeking additional insights, there are more InvestingPro Tips available that could help in making informed decisions. Cadre Holdings' ability to revise its revenue outlook upward while maintaining a strong adjusted EBITDA, as highlighted in the article, aligns with the positive sentiment reflected in these tips. Interested readers can find further analytical depth on Cadre Holdings by visiting the dedicated InvestingPro page at https://www.investing.com/pro/CDRE.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.