Cautious Outlook on Cricut Inc: Declining User Engagement and Market Challenges Prompt Sell Rating

Morgan Stanley analyst Erik Woodring has maintained their bearish stance on CRCT stock, giving a Sell rating today.

Erik Woodring has given his Sell rating due to a combination of factors affecting Cricut Inc’s performance. Despite the company’s efforts to launch new products and increase investments in research and development, as well as sales and marketing, engagement metrics have not stabilized. The number of active and engaged users has continued to decline year-over-year, which is a significant concern for future growth prospects.
Additionally, external factors such as fluctuating tariff policies are creating challenges in consumer electronics spending, further impacting Cricut’s market environment. Although the company reported higher-than-expected gross and operating margins for the first quarter, these figures were bolstered by one-time items, suggesting that the underlying operating margins are actually contracting. Given these ongoing challenges and the unfavorable market conditions, Woodring maintains a cautious outlook with a Sell rating and a price target of $2.90.

Woodring covers the Technology sector, focusing on stocks such as Apple, Dell Technologies, and Garmin. According to TipRanks, Woodring has an average return of 1.9% and a 54.49% success rate on recommended stocks.

In another report released today, Barclays also maintained a Sell rating on the stock with a $4.00 price target.