Crane pany(US:CR) Seeking Alphaยท2024-07-30 03:14Core Viewpoint - Crane NXT (NYSE:CXT) is positioned as a significant player in the payments industry, with a focus on growth despite recent financial performance challenges [2][12] Financial Performance Overview - In 2023, Crane NXT reported revenue of $1.39 billion, a slight increase from $1.34 billion in 2022, driven by growth in both operating segments [3] - The revenue for Crane Payment Innovations in 2023 was $886.4 million, up 1.4% from $874.3 million, primarily due to higher product pricing [4] - Crane Currency's revenue increased by 8.4% from $465.6 million to $504.9 million, attributed to higher international sales [4] - Net income for 2023 decreased from $204.9 million to $188.3 million, despite an increase in operating margin for Crane Payment Innovations from 24.8% to 27.4% [4] - In Q1 2024, revenue fell to $313.6 million from $329.1 million in Q1 2023, with Crane Payment Innovations experiencing the largest decline [5] Management Outlook - Management forecasts revenue growth of 5% to 8% for 2024, with expected earnings per share between $4.10 and $4.35, indicating a slight increase in adjusted net income compared to 2023 [6] - The company aims to grow into a total addressable market of approximately $20 billion, with projected annual revenue of around $3 billion by 2028 [9] Valuation and Comparables - Crane NXT's price-to-earnings ratio is 14.1, which is lower than some comparable firms, suggesting potential value despite recent performance declines [8] - The company completed its first acquisition of OpSec Security for $270 million, expected to contribute $130 million in annual revenue [11] Future Projections - By 2028, Crane NXT is projected to generate around $508 million in net income and $587 million in adjusted operating cash flow, with an EBITDA of approximately $825 million [10] - Analysts anticipate Q2 2024 sales of $367.1 million, an increase from $352.4 million in Q2 2023, with earnings per share expected to rise from $0.75 to $0.95 [11]