Why Is Cimpress (CMPR) Down 6.8% Since Last Earnings Report?

Core Viewpoint - Cimpress reported a mixed performance in its latest earnings report, with adjusted earnings beating estimates but a decline in share price over the past month, raising questions about future performance [1][2]. Financial Performance - Adjusted earnings for Q2 fiscal 2026 were $1.95 per share, surpassing the Zacks Consensus Estimate of $1.61, but down from $2.36 in the same quarter last year [2]. - Total revenues reached $1.04 billion, an 11% increase year-over-year, and exceeded the Zacks Consensus Estimate of $993.4 million [3]. - Organic constant-currency revenue growth was 4% year-over-year, driven by growth across all business segments [3]. Segment Performance - The National Pen segment generated revenues of $150.9 million, up from $131.5 million year-over-year, exceeding estimates of $141.0 million [4]. - Vista, the largest revenue-generating segment, reported revenues of $532.8 million compared to $497.7 million in the prior year, slightly below the estimate of $537.6 million [4]. - The Upload and Print segment's revenues increased to $334.8 million from $273.3 million year-over-year, with PrintBrothers and The Print Group both showing significant growth [5]. - Revenues from All Other Businesses were $67.2 million, up from $60.4 million year-over-year, also exceeding estimates [6]. Cost and Margin Analysis - Cost of revenues increased by 13.3% year-over-year to $554.5 million, while marketing and selling expenses rose by 10% to $246.2 million [7]. - Gross profit increased by 8.4% year-over-year to $487.7 million, with a margin of 46.8%, down 110 basis points from the previous year [8]. - Adjusted EBITDA rose by 5% year-over-year to $138.8 million [8]. Balance Sheet and Cash Flow - As of December 31, 2025, Cimpress had $258.0 million in cash and cash equivalents, an increase from $234 million at the end of the previous quarter [9]. - Long-term debt stood at $1.58 billion, a slight decrease of 0.1% from the previous quarter [9]. - Net cash provided by operating activities for the first half of fiscal 2026 was $189.7 million, compared to $180.9 million in the same period last year [10]. Future Outlook - For fiscal 2026, Cimpress expects revenue growth of 7-8% on a reported basis and 3-4% on an organic constant-currency basis, with net income projected to be at least $79 million [11]. - Adjusted EBITDA is anticipated to be at least $460 million, with cash from operating activities expected to be around $313 million and free cash flow (adjusted) of $145 million [11]. Estimate Trends - There has been a downward trend in estimates, with the consensus estimate shifting down by 52.34% recently [12]. - Cimpress currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [14]. VGM Scores - Cimpress has a strong Growth Score of A but is lagging in Momentum with an F, while also receiving an A for value, placing it in the top quintile for value investors [13].