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CompoSecure (CMPO)
NASDAQ:CMPO
US Market

CompoSecure (CMPO) AI Stock Analysis

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CompoSecure

(NASDAQ:CMPO)

Rating:59Neutral
Price Target:
$14.50
▲(4.17%Upside)
CompoSecure's strong revenue growth and cash management are offset by profitability challenges and negative equity, leading to a moderate financial performance score. Technical indicators suggest caution due to potential overbought conditions. The stock's valuation is negatively impacted by its financial difficulties, while recent corporate events show strategic initiatives for improvement.
Positive Factors
Financial Performance
CMPO's solid 1Q results and reiterated underlying guidance should be well received, with ongoing sales momentum and a stable demand environment expected to support growth.
Strategic Growth
Potential acquisition opportunities within CMPO's value chain and adjacent companies are being considered.
Negative Factors
Financial Outlook
Planned investments aimed at spurring growth and enhancing efficiency weigh on FY25 outlook.
Stock Price Performance
CompoSecure’s share price declined by ~10% during extended trading after the company released a 4Q24 report that offered a mixed bag of metrics, including a top-line miss and a bottom-line beat versus Street estimates.

CompoSecure (CMPO) vs. SPDR S&P 500 ETF (SPY)

CompoSecure Business Overview & Revenue Model

Company DescriptionCompoSecure (CMPO) is a leading provider in the fintech and security industries, specializing in the design and manufacture of premium financial cards and secure payment solutions. The company's core products include metal payment cards, which have gained popularity for their durability and aesthetic appeal, and digital security solutions that enhance payment security for financial institutions and consumers.
How the Company Makes MoneyCompoSecure makes money primarily through the sale of its high-end metal payment cards to financial institutions, including banks and credit unions, which then offer these cards to their customers as part of their premium account packages. Additionally, the company generates revenue through associated services such as card personalization and fulfillment. CompoSecure's partnerships with major payment networks and financial institutions are significant contributors to its earnings, allowing it to access a wide market and maintain strong business relationships. The company also benefits from the growing trend of digital payment solutions, offering products that enhance transaction security, which contributes to its revenue streams.

CompoSecure Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 17.07%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. Highlights included record performance from Arculus, strong international sales growth, and positive adjusted net income growth. However, these were offset by flat overall net sales, a slight decrease in pro forma adjusted EBITDA, and a decline in domestic sales.
Q1-2025 Updates
Positive Updates
Record Arculus Performance
Arculus delivered a net positive contribution and record results for the quarter, with new vertical industry wins including MetaMask and MoneyGram.
Strong International Sales Growth
International net sales increased by 28% compared to the prior year.
Positive Adjusted Net Income Growth
Adjusted net income increased 21% to $28.4 million.
Strong Program Activity
Several high-profile customer wins including Citibank, Robinhood, Karta, Koho, WealthSimple, and Scotia Bank.
Low Debt Leverage
Bank senior secured debt leverage ratio was 1.05 times at March 31, 2025, compared to 1.34 times at March 31, 2024.
Negative Updates
Flat Net Sales
Consolidated net sales were flat at $103.9 million compared to the prior year.
Slight Decrease in Pro Forma Adjusted EBITDA
Pro forma adjusted EBITDA decreased by 2% to $33.7 million due to higher general and administrative expenses.
Domestic Sales Decline
Domestic net sales were down $3.3 million or 4% from the prior year.
Slight Decrease in Gross Margin
Consolidated gross margin for the quarter was 52.5% of net sales compared to 53.1% for the same quarter of the prior year.
Company Guidance
During the CompoSecure Q1 2025 earnings call, the company reaffirmed its full-year guidance, anticipating mid-single-digit growth in consolidated net sales and pro forma adjusted EBITDA. The first quarter saw consolidated net sales nearly flat at $103.9 million, while the pro forma adjusted EBITDA decreased by 2% to $33.7 million, primarily due to increased general and administrative expenses. The pro forma adjusted EBITDA margin declined slightly to 32.4% from 33.2% the previous year. Adjusted net income rose by 21% to $28.4 million, with adjusted diluted EPS at $0.25, up from $0.24 in the prior year. CompoSecure's focus on operational excellence, particularly through the implementation of its Operating System, has begun yielding benefits, and the company expects continued momentum in both payment cards and the Arculus business throughout 2025. The balance sheet remains strong, with cash and cash equivalents at $71.7 million and total debt at $195 million.

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
55
Neutral
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.
Balance Sheet
30
Negative
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.
Cash Flow
65
Positive
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
420.57M390.63M378.48M267.90M260.59M
Gross Profit
219.23M209.08M219.64M144.80M132.63M
EBIT
107.62M119.09M114.89M81.40M83.96M
EBITDA
-51.63M154.60M145.43M101.36M93.87M
Net Income Common Stockholders
-53.72M19.24M131.81M83.40M77.81M
Balance SheetCash, Cash Equivalents and Short-Term Investments
77.46M41.22M13.64M21.90M13.42M
Total Assets
473.92M201.04M162.94M131.40M81.36M
Total Debt
17.25M344.64M367.61M387.60M255.89M
Net Debt
-60.21M303.43M353.97M365.70M242.47M
Total Liabilities
617.36M406.81M454.94M539.10M273.91M
Stockholders Equity
-143.45M-802.36M-292.00M-407.70M-192.55M
Cash FlowFree Cash Flow
122.14M93.37M83.73M73.00M79.56M
Operating Cash Flow
129.55M104.31M92.78M77.80M87.06M
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

Technical Analysis Sentiment
Positive
Last Price13.92
Price Trends
50DMA
11.65
Positive
100DMA
12.00
Positive
200DMA
11.96
Positive
Market Momentum
MACD
0.63
Negative
RSI
73.31
Negative
STOCH
84.10
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMPO, the sentiment is Positive. The current price of 13.92 is above the 20-day moving average (MA) of 12.99, above the 50-day MA of 11.65, and above the 200-day MA of 11.96, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 73.31 is Negative, neither overbought nor oversold. The STOCH value of 84.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 3 New Risks
1.
The Management Agreement does not create a mutually exclusive relationship between Holdings and Resolute Management. Q4, 2024
2.
The Management Agreement may be terminated by Resolute Holdings or Holdings, and a termination fee may be payable in certain circumstances. Q4, 2024
3.
We may have conflicts of interest with Resolute Holdings and its other affiliates. Q4, 2024

CompoSecure Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
DADAC
78
Outperform
$1.61B3.5614.14%3.86%4.93%-17.08%
NMNMM
77
Outperform
$1.16B3.5711.19%0.51%0.28%-17.08%
GSGSL
76
Outperform
$915.77M2.4327.25%7.29%3.94%19.85%
75
Outperform
$1.10B3.7612.57%5.02%17.77%-5.90%
SCSCS
74
Outperform
$1.19B10.2012.70%3.86%0.20%50.50%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
59
Neutral
$1.42B8.26%2.38%-5.74%-192.12%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CMPO
CompoSecure
13.92
8.72
167.69%
CMRE
Costamare
8.90
-2.12
-19.24%
DAC
Danaos
86.00
-2.38
-2.69%
GSL
Global Ship Lease
25.65
-0.92
-3.46%
NMM
Navios Maritime Partners
38.99
-11.86
-23.32%
SCS
Steelcase
10.57
-1.35
-11.33%

CompoSecure Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
CompoSecure Approves Key Charter Amendments at Annual Meeting
Positive
May 28, 2025

On May 28, 2025, CompoSecure, Inc. held its 2025 Annual Meeting of Stockholders where key amendments to the company’s charter were approved, including an increase in authorized shares and the removal of obsolete provisions. Additionally, the meeting saw the election of three directors, approval of amendments to the company’s equity plan, and the ratification of Grant Thornton LLP as the independent auditor, indicating strategic moves to enhance corporate governance and operational flexibility.

The most recent analyst rating on (CMPO) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on CompoSecure stock, see the CMPO Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
CompoSecure Reports Strong Q1 2025 Financial Results
Positive
May 12, 2025

On May 12, 2025, CompoSecure announced its financial results for the first quarter ending March 31, 2025, reporting operating results in line with expectations and reiterating its full-year guidance. The company completed the spin-off of Resolute Holdings Management, Inc. and adopted the equity method of accounting for its results. CompoSecure reported strong demand and sales momentum, particularly in its Arculus business, and highlighted record results that contributed positively to its financial performance. The company’s strategic investments and implementation of the CompoSecure Operating System are expected to drive continued growth and efficiency throughout 2025.

The most recent analyst rating on (CMPO) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on CompoSecure stock, see the CMPO Stock Forecast page.

M&A TransactionsFinancial Disclosures
CompoSecure Board Values Spin-Off Shares at $106.4M
Neutral
May 8, 2025

On February 28, 2025, CompoSecure, Inc. completed the spin-off of Resolute Holdings Management, Inc. by distributing shares of Resolute Holdings to its Class A common stockholders. This spin-off was treated as a taxable event, resulting in taxable gain for CompoSecure and taxable dividend income for its shareholders. On May 8, 2025, the board of directors valued the distributed shares at $106.4 million, or approximately $12.48 per share.

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.