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CompoSecure (CMPO)
NASDAQ:CMPO
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CompoSecure
(NASDAQ:CMPO)
49Neutral
Positive Factors
Profitability
Arculus turned profitable in Q4 with a positive adjusted EBITDA of $3.5 million.
Share Buyback
CMPO increased its share buyback program to $100M, indicating confidence in its financial position.
Spin-off Strategy
The spin-off of Resolute Holdings is seen as positive, allowing CMPO to focus on its core metal card business.
Negative Factors
Financial Agreement
CMPO agreed to pay Resolute a quarterly management fee in cash equal to 2.5% of its latest 12 months’ adjusted EBITDA, impacting the financial outlook.
Financial Outlook
Planned investments aimed at spurring growth and enhancing efficiency weigh on FY25 outlook.
Revenue Guidance
Preliminary '24 revenues are slightly below analyst expectations, though in-line with company guidance.
CompoSecure (CMPO) vs. S&P 500 (SPY)
Market Cap
$1.12B
Dividend Yield2.74%
Average Volume (3M)1.26M
Price to Earnings (P/E)―
Beta (1Y)0.83
Revenue Growth7.67%
EPS Growth-199.44%
CountryUS
Employees1,000
SectorIndustrials
Sector Strength66
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)-1.15
Shares Outstanding102,311,980
10 Day Avg. Volume750,665
30 Day Avg. Volume1,263,032
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.75
Price to Cash Flow (P/CF)8.20
P/FCF Ratio8.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.00Price Target Upside37.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
CompoSecure Business Overview & Revenue Model
Company DescriptionCompoSecure, Inc. manufactures and designs metal, plastic, composite ID, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which comprise the Arculus Key card Cold Storage hardware device and companion Arculus Wallet mobile App to keep the Private Key in the Arculus Key card highly secure and store cryptocurrency and digital assets. It serves financial institutions, plastic card manufacturers, government agencies, system integrators, and security specialists. The company was founded in 1910 and is based in Somerset, New Jersey.
How the Company Makes MoneyCompoSecure generates revenue primarily through the sale of its high-end payment cards to financial institutions and fintech companies. The company's revenue model is centered around long-term contracts and partnerships with these institutions, where it provides customized card solutions that cater to the branding and security needs of its clients. Additional income streams include offering card personalization services and embedding advanced security features that command a premium price. CompoSecure's ability to innovate and provide technologically advanced solutions enables it to maintain strong relationships with its clients and drive continuous revenue growth. While specific financial details or revenue figures are not publicly disclosed in this format, the company's earnings are significantly influenced by its expertise in combining security with top-tier design in its product offerings.
CompoSecure Financial Statement Overview
Summary
CompoSecure exhibits strong revenue growth and effective cash flow management, which are positive indicators for future prospects. However, the company faces significant challenges with profitability and financial stability, highlighted by negative equity and substantial leverage. Addressing these issues will be crucial for sustainable growth.Income Statement
CompoSecure has shown consistent revenue growth over the years, with a notable increase from $243 million in 2019 to $420 million in 2024. However, despite the revenue growth, the company has faced challenges in profitability, as indicated by a net loss in 2024. Gross profit margins have remained strong, but the decline in net income and EBIT margin suggests potential inefficiencies or increased expenses.55
Neutral
Balance Sheet
The company's financial stability is concerning, with negative stockholders' equity and high total liabilities, indicating potential solvency issues. The debt-to-equity ratio is unfavorable due to negative equity, highlighting significant leverage. Although total assets have grown, the equity ratio remains negative, reflecting substantial financial risk.30
Negative
Cash Flow
CompoSecure has demonstrated strong operating cash flow, with consistent growth in free cash flow over the years, indicating effective cash management. The operating cash flow to net income ratio is robust, suggesting efficient conversion of income into cash. However, the high level of financing cash flow indicates reliance on external funding.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 420.57M | 390.63M | 378.48M | 267.90M | 260.59M | Gross Profit |
| 219.23M | 209.08M | 219.64M | 144.80M | 132.63M | EBIT |
| 107.62M | 119.09M | 114.89M | 81.40M | 83.96M | EBITDA |
| -51.63M | 154.60M | 145.43M | 101.36M | 93.87M | Net Income Common Stockholders |
| -53.72M | 19.24M | 131.81M | 83.40M | 77.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 77.46M | 41.22M | 13.64M | 21.90M | 13.42M | Total Assets |
| 473.92M | 201.04M | 162.94M | 131.40M | 81.36M | Total Debt |
| 17.25M | 344.64M | 367.61M | 387.60M | 255.89M | Net Debt |
| -60.21M | 303.43M | 353.97M | 365.70M | 242.47M | Total Liabilities |
| 617.36M | 406.81M | 454.94M | 539.10M | 273.91M | Stockholders Equity |
| -143.45M | -802.36M | -292.00M | -407.70M | -192.55M |
| Cash Flow | Free Cash Flow | |||
| 122.14M | 93.37M | 83.73M | 73.00M | 79.56M | Operating Cash Flow |
| 129.55M | 104.31M | 92.78M | 77.80M | 87.06M | Investing Cash Flow |
| -9.95M | -10.94M | -9.05M | -4.80M | -7.50M | Financing Cash Flow |
| -83.36M | -65.79M | -92.03M | -64.50M | -92.87M |
CompoSecure Technical Analysis
Negative
10.94
Price Trends
12.29
Negative
12.52
Negative
10.75
Positive
Market Momentum
-0.34
Negative
39.40
Neutral
25.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMPO, the sentiment is Negative. The current price of 10.94 is below the 20-day moving average (MA) of 11.20, below the 50-day MA of 12.29, and above the 200-day MA of 10.75, indicating a neutral trend. The MACD of -0.34 indicates Negative momentum. The RSI at 39.40 is Neutral, neither overbought nor oversold. The STOCH value of 25.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMPO.
CompoSecure Risk Analysis
CompoSecure disclosed 61 risk factors in its most recent earnings report. CompoSecure reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CompoSecure Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.48B | 3.04 | 15.68% | 4.16% | 6.00% | -9.89% | |
78 Outperform | $824.79M | 2.39 | 26.71% | 7.47% | 5.37% | 16.97% | |
75 Outperform | $1.16B | 3.25 | 12.46% | 0.51% | 2.08% | -14.91% | |
68 Neutral | $1.26B | 10.93 | 12.80% | 3.60% | 0.20% | 51.62% | |
64 Neutral | $1.19B | 4.09 | 13.07% | 4.62% | 37.10% | -17.36% | |
62 Neutral | $8.06B | 13.61 | 3.91% | 3.11% | 3.80% | -14.06% | |
49 Neutral | $1.12B | ― | 8.26% | 2.74% | 7.67% | -199.44% |
* Industrials Sector Average
Performance Comparison
CMPO
CompoSecure
10.87
5.23
92.73%
CMRE
Costamare
9.84
-1.15
-10.46%
DAC
Danaos
79.32
9.57
13.72%
GSL
Global Ship Lease
22.85
3.89
20.52%
NMM
Navios Maritime Partners
38.89
-3.42
-8.08%
SCS
Steelcase
10.96
-1.67
-13.22%
CompoSecure Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -8.99% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a year of solid growth and strategic investments for future expansion. Despite flat domestic sales and a decline in adjusted EBITDA, the company achieved significant debt reduction, expanded its international presence, and saw positive contributions from new ventures like Arculus.Highlights
Strong Financial Performance for 2024
CompoSecure delivered 8% growth in net sales with robust free cash flow generation and materially improved the balance sheet with a 60% reduction in net debt, down to $120 million.
Successful Global Expansion
International net sales were up 7% to $15.4 million in Q4, with high-profile metal payment card launches globally, including Citi, Barclays, and JetBlue.
Positive Contribution from Arculus
Q4 marked the first quarter of positive net contribution from Arculus, with $10.5 million of revenue for 2024 and a net investment of $3.5 million in adjusted EBITDA.
Lowlights
Flat Domestic Sales in Q4
Domestic sales were flat year-over-year, impacting overall net sales growth.
Decrease in Net Income
Net loss was $48.4 million in Q4 compared to net income of $31 million last year, driven by changes in the fair value of liabilities.
Adjusted EBITDA Decline
Adjusted EBITDA in Q4 decreased by 10% to $33.6 million, reflecting strategic investments in the business.
Company Guidance
During the CompoSecure Inc. earnings call for the fourth quarter and full year 2024, the company provided guidance for the upcoming fiscal year, projecting mid-single-digit growth in both net sales and adjusted EBITDA. The company anticipates building sales momentum throughout 2025, leveraging its strong customer relationships and innovative product offerings. In 2024, CompoSecure achieved 8% growth in net sales, with domestic sales up 7% and international sales increasing by 11%. The company also reported a 60% reduction in net debt, bringing it down to $120 million. Despite a 10% decrease in adjusted EBITDA in Q4, the company made strategic investments to boost organic growth and operational efficiency. CompoSecure's Arculus unit reported its first quarter of positive net contribution in Q4, with a full-year revenue of $10.5 million and a net investment of $3.5 million in adjusted EBITDA. For 2025, CompoSecure plans to focus on accelerating payment card organic growth, enhancing efficiency through its operating system, and pursuing accretive mergers and acquisitions.CompoSecure Corporate Events
Delistings and Listing ChangesBusiness Operations and Strategy
CompoSecure Completes Spin-Off of Resolute Holdings
Neutral
Mar 5, 2025
On February 28, 2025, CompoSecure, Inc. completed the spin-off of Resolute Holdings Management, Inc., distributing its shares to CompoSecure stockholders. This strategic move resulted in Resolute Holdings becoming a publicly traded entity on Nasdaq under the ticker ‘RHLD’. The spin-off involved several agreements to manage the separation, including a Management Agreement granting Resolute Holdings control over CompoSecure Holdings’ operations. This separation is expected to impact CompoSecure’s financial structure and operational dynamics, with Resolute Holdings assuming management responsibilities and liabilities for certain assets and employees.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.