Citi analyst Asiya Merchant has maintained their bearish stance on CRCT stock, giving a Sell rating on August 7.
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Asiya Merchant has given his Sell rating due to a combination of factors impacting Cricut Inc. Despite the company surpassing expectations with a 2% year-over-year revenue growth and a 22% increase in EPS, there are concerns about the sustainability of this growth. The demand for Accessories and Materials has increased, but this is offset by a decline in machine sales, which raises questions about the overall demand stability.
Furthermore, Merchant highlights the limited visibility into future sales, as the company does not provide regular guidance, making it challenging to predict long-term performance. The high-risk rating is also influenced by the expectation that consumer-focused companies like Cricut may be more adversely affected by inflation and reduced demand compared to other sectors. Until there is clear evidence of consistent revenue and margin improvements, Merchant remains cautious about the potential for multiple expansion and maintains a conservative outlook on CRCT shares.
In another report released on August 7, Barclays also maintained a Sell rating on the stock with a $4.00 price target.
CRCT’s price has also changed slightly for the past six months – from $5.630 to $5.570, which is a -1.07% drop .